 |
||||||||||||
          |
||||||||||||
 |
||||||||||||
  |
||||||||||||
 |
||||||||||||
| Summary of Insurance Coverage |
||||||||||||
|
|
||||||||||||
| I. INTRODUCTION |
||||||||||||
| RECO's
registrants currently enjoy three types of insurance coverage - errors
& omissions, commission protection, and consumer deposit. This Summary of Insurance Coverage provides you with an overview of the features of the Master Insurance Policy (the Policy) issued to RECO which provides insurance coverage to its registrants. This Summary of Insurance Coverage focuses on some of the more significant highlights of the Policy and what they mean to you - the registrant. Note: The word "Insured" is used in this Summary instead of "registrant" to describe those individuals, brokers or brokerages that are registered with RECO who are insured under the Policy. This Summary is not intended to be an exhaustive review of the Policy nor is it to be relied upon as such. Please read your Policy carefully. You can view the Policy by going to the "Policy Wording" Tab or by clicking on the following link policy-wording.html |
||||||||||||
| RECO Insurance Policy |
||||||||||||
| If you have any questions about your insurance coverage
please contact the insurance broker, Alternative Risk Services at: |
||||||||||||
Alternative Risk Services 250 Yonge Street Suite 2900 Toronto, ON M5B 2L7 Tel: 416-408-5330 Toll Free: 1-866-426-1666 Fax: 416-408-3721 Email: info@reco-claims.ca |
||||||||||||
| II. ERRORS & OMISSIONS COVERAGE | ||||||||||||
WHO IS PROTECTED The Policy provides protection for an Insured who has or is alleged to have committed a negligent act. An Insured must not, under any circumstances, accept liability for a negligent act as this would prejudice the Insurer's position to defend the claim made against the Insured. AMOUNT OF COVERAGE The insurance protection afforded to an Insured for Errors and Omissions claims is $1,000,000 for any one claim and an aggregate of up to $3,000,000 for multiple claims within a Policy year. Effective September 1, 2009, risk rating was introduced to the policy in the form of a graduated deductible i.e. the deductible amount gradually increases with each additional claim settlement made on behalf of the same registrant over a three year period. This means registrants with more than one claim will contribute more towards the cost of each additional claim settled on their behalf. The deductible payable by a registrant for the first claim paid continues to be $2,500. However, any further claims paid by the insurer for claims which were reported to the insurer after September 1, 2009 within any three year period will result in an additional payment of $2,500 per paid claim. WHAT'S COVERED The Policy covers claims arising out of the provision of "Professional Services" as a real estate salesperson or broker registered with RECO. "Professional Services" would include work as a real estate consultant, real estate counselor, property manager (not exceeding 35% of revenue), property management consultant and rental agent. The Policy does not provide coverage for an appraisal that is done in the usual course of business by individuals with AACI, CRA, P. App, P.Val, or CNAREA designations. The Policy does not provide any coverage for opinions of market value given for the purpose of financing. This restriction applies to all registrants in Ontario. However, the Policy does cover activities such as: • Opinions of market value for relocation companies; • Opinions of market value for capital gain purposes; • Opinions of market value for estate valuations; and • Opinions of market value for use in matrimonial disputes (determining net family property values). Please refer to your Policy for details regarding coverages and restrictions for certain services. Coverage is also extended to include theft or damage to customers' property during an open house while in the care, custody and control of the Insured. This coverage is subject to a limit of $25,000 and a $500 deductible. WHAT'S NOT COVERED The Policy does not cover claims arising out of fraudulent, criminal, dishonest or malicious acts, claims for unpaid commissions or arising out of disputes relating to commissions (see also the related commentary under the heading Commission Protection Coverage), claims for fines, penalties or taxes, claims arising out of property management where over 35% of an Insured's or Insured Firm's revenue is generated from that business, claims for property or property held on deposit or claims relating to or arising from mortgage brokering except where an Insured simply identifies a source of funding and directs the borrower to that source. The Policy does not cover claims arising from bodily injury and property damage. Claims arising from property management services are not covered where the revenue due to property management services of the Insured or Insured Firm exceeds 35% of the total gross revenue. Property Management requires a specialty insurance coverage. Please contact the insurance broker, Alternative Risk Services, for further details if you are interested in purchasing this coverage. DIRECT OR INDIRECT INTEREST EXCLUDED This exclusion applies to an Insured that has a direct or indirect interest (including as a shareholder or otherwise as a principal in the transaction) unless the Insured has fully complied with the Section 18 "Disclosure of Interest" of the Code of Ethics as set out in Ontario Regulation 580/05 under the Real Estate and Business Brokers Act, 2002 or successor legislation as from time to time amended. RECO REGISTRATION IS A PRECONDITION TO COVERAGE The Policy only covers activities of an Insured who is registered with RECO. An Insured who inadvertently or unknowingly employs an unregistered salesperson and who is vicariously liable for the acts of that employee will be covered. NOTICE OF CLAIM As an Insured, you must give written notice to the Insurer as soon as possible once a claim is made against you or a circumstance which might give rise to a claim arises i.e. a potential claim. A potential claim arises where you could reasonably foresee that your actions did or would result in a claim. If there is a problem with the closing of the transaction or if a complaint is made by someone about your actions either before, on or after closing, it is likely that the party making that complaint may allege that the situation arose as a result of an act, error or omission of one or more of the Insureds involved in the transaction. You should immediately notify the Insurer of any claim or potential claim (see claim reporting instructions below). The adjuster or the defence counsel appointed by the Insurer will investigate and, if necessary, provide you with guidance on what you can and cannot do. When a claim or a potential claim arises, even if you feel that it may be another Insured's error, other than co-operating with any investigation being conducted by RECO, you should refrain from providing statements or taking any steps to assist any parties to a dispute without first consulting with the Insurer and/or the Insurer's appointed defence counsel. Ultimately, any statement may contain admissions of liability that may result in the Insurer denying coverage to you. This is a claims made Policy which means that claims must be reported in the policy year that the potential claim is discovered. To download a Claim Reporting Form for an Errors and Omissions claim click here ERRORS & OMISSIONS CLAIM REPORTING FORM RETIREMENT OR LEAVING THE PROFESSION An Insured who retires from selling real estate or leaves the profession for any reason other than by reason of disciplinary action by RECO automatically has two (2) years of insurance coverage (i.e. run-off coverage) from the date of retirement or leaving the profession provided that any claims made relate to errors that were committed prior to retirement or leaving the profession and while an Insured. There is no charge for these first two years of insurance. As well, Lloyd's offers an additional three (3) years of run-off coverage for a total of (5) five years for an additional one-time premium of 30% of your last premium paid. If you are retiring or leaving the profession and you are interested in this additional run-off coverage or to apply for the additional extension of coverage any time during the first two years of your retirement, please contact the insurance broker, Alternative Risk Services, for further details. Contacts |
||||||||||||
| III. COMMISSION PROTECTION COVERAGE |
||||||||||||
| WHO IS PROTECTED The Commission Protection coverage provides protection for the salesperson/broker and to the co-operating broker to whom a commission is owed, but not paid, due to the insolvency of an Insured or the theft, fraud, misappropriation or wrongful conversion directly or indirectly of moneys or property held by an Insured (an "Occurrence"). Under this Policy the salesperson/broker and/or the co-operating broker are both the Insured and the claimant. AMOUNT OF COVERAGE The insurance protection afforded to an Insured for loss of commission due to an "Occurrence" under this Policy is $100,000 for any one claim. The Policy will cover up to a maximum of $1,000,000 for all claims arising out of an "Occurrence" within a policy year. If a claim payment is made to an Insured there is a deductible of $250 payable by the Insured/claimant. WHAT'S COVERED This Policy covers the loss of an Insured's commission arising out of an "Occurrence". WHAT'S NOT COVERED The Policy does not cover a claim by an Insured while acting as an executor or trustee or in any role as a fiduciary other than as a salesperson or broker. The Policy does not cover commission disputes. BROKER TO MAINTAIN A COMMISSION TRUST ACCOUNT While REBBA 2002 does not currently require a broker to maintain a Commission Trust Account, registrants should take note that there may be no coverage if an Insured has failed to use his/her best efforts to determine that the broker has set up and is maintaining a Commission Trust Account. At a minimum the Insured should be asking the broker whether the broker maintains a Commission Trust Account to satisfy himself or herself that commissions are afforded the applicable protections of a Commission Trust Account. The failure of a broker to maintain a Commission Trust Account or to pay a commission out of a Commission Trust Account, other than as qualified above, should not affect the coverage available to an Insured under the Policy. RECO REGISTRATION IS A PRECONDITION TO COVERAGE The coverage only covers activities of an Insured who is registered with RECO at the time of the "Occurrence". NOTICE OF A CLAIM Notice of claims can be provided to the Insurer by either RECO or by a salesperson/broker/co-operating broker that has not been paid a commission by reason of an "Occurrence". This coverage is on a claims made basis, which means the claim must be reported in the policy year that the potential claim is discovered. To download a Claim Reporting Form for a Commission Protection claim click here COMMISSION PROTECTION CLAIM REPORTING FORM RETIREMENT OR LEAVING THE PROFESSION While there is no coverage under this Policy after an Insured leaves the profession, so long as a commission becomes due and owing to an Insured before leaving the profession, coverage would be provided and a claim would be paid even if the "Occurrence" takes place after the Insured's departure. |
||||||||||||
| IV. CONSUMER DEPOSIT COVERAGE | ||||||||||||
| WHO IS PROTECTED The Consumer Deposit coverage is for the customer or the client of an Insured. This coverage is designed to protect the consumer but also prevents claims against Insureds who, in the absence of such insurance, would have a claim made against them. Claimants are protected for losses due to the insolvency of an Insured or the theft, fraud, misappropriation, wrongful conversion directly or indirectly of moneys or property held on deposit for the consumer by the salesperson/broker (an "Occurrence"). AMOUNT OF COVERAGE The insurance protection afforded to a claimant due to an "Occurrence" is $100,000 for any one claimant and up maximum of $1,000,000 for all claimants arising out of any one "Occurrence" in a Policy year. There is no deductible under this coverage. WHAT'S COVERED A consumer has protection for a loss sustained in relation to a trade in real estate arising from an "Occurrence". WHAT'S NOT COVERED Claims arising out of an Insured acting as an executor, administrator, trustee, guardian, conservator or in any other fiduciary capacity other than as a salesperson or broker for a claimant are not covered under the Policy. RECO REGISTRATION IS PRECONDITION TO COVERAGE The Policy only covers claims relating to activities of a salesperson or broker who is registered with RECO. NOTICE OF CLAIM If you become aware of a situation where you have cause to believe that another registrant, broker or brokerage may be engaged in activities that contravene RECO’s rules or regulations and/or which might give rise to a claim under this coverage please report this situation on a confidential basis to RECO immediately To download a Claim Reporting Form for a Consumer Deposit claim click here CONSUMER DEPOSIT CLAIM REPORTING FORM |
||||||||||||
| V. POLICY
ENDORSEMENTS |
||||||||||||
| There are two endorsements to the Policy. The first is a
USA Jurisdiction Endorsement which reduces the aggregate (i.e. the
total amount of coverage for any number of claims in any one Policy
year) for coverage for claims brought or judgments awarded in the
United States of America to $1,000,000 for errors and omissions and
$100,000 for each of commission protection and consumer deposit for any
losses in the United States of America. The second is a Terrorism
Exclusion endorsement that precludes any coverage for claims for damage
arising out of acts of terrorism. |
||||||||||||
| VI. OTHER
IMPORTANT
CONSIDERATIONS |
||||||||||||
| RETIREMENT OR LEAVING THE
PROFESSION If you are leaving the profession or retiring for reasons other than disciplinary action, you automatically have two (2) years of run-off coverage for errors & omissions claims. In addition, you have the option of purchasing an additional three (3) years of run-off coverage for 30% of your last annual premium. If you are interested in this additional run-off coverage please contact the insurance broker, Alternative Risk Services, for further details. RECO REGISTRATION IS A PRECONDITION TO COVERAGE Termination of your membership in RECO for non-payment of premiums has the following consequences on your insurance coverage:
|
||||||||||||
| VII. CLAIMS
REPORTING CONTACT INFORMATION |
||||||||||||
| Claim reporting forms can be downloaded from this website: Errors and Omissions Claim Reporting Form Consumer Deposit Claim Reporting Form Commission Protection Claim Reporting Form or from RECO's website www.reco.on.ca. Hard copies are available upon request from the broker, Alternative Risk Services Inc. info@reco-claims.ca or from the adjuster, Granite Claims Solutions. |
||||||||||||
| If you need to report an
Errors and Omissions or Commission Protection claim please contact and
report your claim to: Granite Claims Solutions Attention: Jan Perkins 16700 Bayview Avenue, Suite 211 Newmarket, ON L3X 1W1 Toll Free Tel: 1-877-740-1913 Toll Free Fax: 1-866-735-1033 Real Estate Council of Ontario
If you have other questions about the Policy, please contact
Alternative Risk Services at info@reco-claims.ca.3250 Bloor Street West Suite 600, East Tower Toronto, ON M8X 2X9 Tel: (416) 207-4800 Toll Free: 1-800 245-6910 Fax: 416 207-4820 E-Mail: insurance@reco.on.ca |
||||||||||||
| Real Estate (RECO) Errors and Omissions Insurance Program Underwritten by certain underwriters at Lloyd’s Endorsed by the Real Estate Council of Ontario Distributed by Alternative Risk Services, a division of 3303128 Canada Inc. Managed by Dion, Durrell + Associates Inc. |
||||||||||||
|
Copyright
©
2007-2010 Dion, Durrell + Associates Inc. and Alternative Risk Services, a division of 3303128 Canada Inc. All rights reserved. Property of Dion, Durrell + Associates
Inc. and Alternative Risk Services, a division of 3303128 Canada Inc.
Use
of this web site
constitutes your acceptance of these terms.
|
||||||||||||