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Errors & Omissions Insight | Liability Insurance is Mandatory For Mortgage Brokers In Many Provinces
Do you know if your insurance policy meets the current FSCO guidelines? While Canada’s hot property markets have you working long hours, overlooking your options for professional liability insurance for mortgage brokers can add up to a major oversight.
Property buyers, inspection firms and/or others may decide to sue you. What can you do? Start by first understanding the real risks that you face as a mortgage broker.
It’s mandatory in Ontario for mortgage brokers to carry errors & omissions liability insurance. Other provinces such as Alberta, British Columbia and Manitoba have also made mortgage broker’s errors & omissions liability insurance mandatory.
Professional Liability Insurance For Mortgage Brokers & FSCO Guidelines?
As published on the FSCO website, the minimum guidelines for mortgage broker’s errors & omissions liability insurance are:
- Insured must be defined as everyone engaged by the Insured in connection with their work
- Assignment Clause
- Covers all Ontario licensed mortgage brokers for their activities as defined by the Mortgage Brokerages, Lenders and Administrators Act
- No retroactive date
- Automatic 12 months extended reporting period will be provided if insurer chooses to cancel or nonrenew the policy
- Complies with applicable statue
- Minimum limit of $500,000 per claim / $1,000,000 aggregate
- Defence costs for all allegations against Mortgage Broker
- FSCO allowed to report a claim on Mortgage Broker’s policy if Mortgage Broker is unable to
- Injured third parties will have direct right of action against insurer
- Insurer collects deductible from Mortgage Broker not injured third parties
- Incidents should be reported to the insurer within the policy period
- Fraud endorsement must be included for the limit of $500,000 per claim / $1,000,000 aggregate
- Superintendent must receive notice of cancellation and cancellation does not take effect until after 30 days notice
You can visit FSCO’s website for a comprehensive overview of all the guidelines.
5 Professional Liability Insurance For Mortgage Brokers Coverages To Consider
When choosing your insurance, there are more things to consider. ALIGNED can provide you with more options for your professional liability for mortgage brokers coverage as well as products and services to address risks such as:
- Auto Insurance
- Employment Practices Liability
- Cyber Liability
- General Liability
- Office Insurance
Professional Liability Insurance For Mortgage Brokers
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