Mortgage Broker Insurance Overview

Mortgage Broker Insurance 101: Does your mortgage broker insurance policy meet the FSCO Guidelines?

Since 2008 it has been mandatory in Ontario for Mortgage Brokers to carry errors & omissions liability insurance. Other provinces; Alberta, British Columbia and Manitoba have also made Mortgage Broker’s Errors & Omissions Liability insurance mandatory.

As published on the FSCO website, here are the minimum guidelines for Mortgage Broker’s Errors & Omissions Liability insurance:

  1. Insured must be defined as everyone engaged by the Insured in connection with their work
  2. Assignment Clause
  3. Covers all Ontario licensed mortgage brokers for their activities as defined by the Mortgage Brokerages, Lenders and Administrators Act
  4. No retroactive date
  5. Automatic 12 months extended reporting period will be provided if the insurer chooses to cancel or non renew the policy
  6. Complies with an applicable statue
  7. Minimum limit of $500,000 per claim / $1,000,000 aggregate
  8. Defence costs for all allegations against Mortgage Broker
  9. FSCO allowed reporting a claim on Mortgage Broker’s policy if Mortgage Broker is unable to
  10. Injured third parties will have a direct right of action against the insurer
  11. The insurer collects deductible from Mortgage Broker not injured third parties
  12. Incidents should be reported to the insurer within the policy period
  13. Fraud endorsement must be included for the limit of $500,000 per claim / $1,000,000 aggregate
  14. 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.

Contact ALIGNED’s Errors & Omissions/Professional Liability Practice Leader & Advocate Ana Alberto directly at 1-866-964-7186  today to obtain a quotation on your mortgage broker insurance.

ALIGNED Across Canada   100% Canadian owned, ALIGNED is a premiere insurance brokerage that serves more than 1,400 clients across the country. ALIGNED’s offices in Toronto, Calgary and Vancouver are supported by a national operations centre in Cambridge, Ontario. Uniquely within the industry, ALIGNED creates, negotiates and delivers the best business insurance and risk management strategies/solutions to organizations like yours.

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