E & O Insurance How many offices have a monitored risk management policy in place to ensure that it is being followed? Registrant’s should realize that their E & O Insurance is primarily for the protection of the consumer and not the registrant and contains exclusions with respect to coverage in conjunction with recourse provision. That with respect to a civil lawsuit, the insurance company has unrestricted control over - if - when - and - how the claim will be managed or settled and by whom, failing which they will not honour the claim and the registrant is left to his or her own resources. They do not cover any legal costs with respect to alleged regulatory violations and here again, a registrant is left to their own resources. Mounting a legal defence with respect to a regulatory prosecution can be very expensive, cash-in-advance proposition and if successfully prosecuted, the penalties can devastate the average registrant. Views & Comments invited

Your comments are somewhat correct. E&O does not cover legislative or rules and reg defence. However if you are thinking that it is for the consumers protection only you are dead wrong. Of course they reserve the right to handle the defence and settle it if necessary. If you want waive your coverage and defend your self. In Alberta and Saskatchewan it is mainly fraud that precludes you receiving a defence or misrepresenting to the insurer the nature of your relationship to the parties involved. However there is an element of truth that E&O is for the consumer’s protection. Going back almost 2 decades almost no industry members carried coverage and would declare bankruptcy if a judgment was received against them. So yes there is some protection for the client and if you ask me there is protection for the insured. And in a perfect world agents could chart there own defence. However we ask the public to trust us as the experts. Defence of claims is their expertise and although some would prefer to fight to the bitter end, Some times cooler heads must prevail.

Did anyone read this info in the latest Edge News from OREA ? We in Ontario have Commission Trust Accounts. Regarding Deposit insurance, the banks insure accts, and deposits cannot be released without proper docs being signed by all parties to the contract, or by court order. It seems that someone is trying to sell insurance, telling agents that they should buy it for their buyers.

The way this article reads, it would appear that this deposit insurance and commission insurance are mandatory along with E & O insurance, or registrants cannot practice. Needs clarification. Any thoughts?

You might want to read my article on deposits : down payments at - Deposit or Down Payment – the Difference Between Them is -
(and - Do you know where your money is, and why?)
http://www.carolyne.com/bramptonhomes/downpayment.html

========= (below as it appears in the Edge)
New: Ont. Reg. 579/05 – Educational Requirements, Insurance, Record and
Other Matters, Subsection 11 (6), Insurance, prohibits registrants from
collecting commissions if their insurance premiums are not paid in full. To
comply with Subsec. 11(6): Make sure you have Commission Protection
Insurance, Deposit Insurance and Errors and Omissions Insurance in place and
in good standing.

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http://www.Carolyne.com
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