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:
- 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 the insurer chooses to cancel or non renew the policy
- Complies with an applicable statue
- Minimum limit of $500,000 per claim / $1,000,000 aggregate
- Defence costs for all allegations against Mortgage Broker
- FSCO allowed reporting a claim on Mortgage Broker’s policy if Mortgage Broker is unable to
- Injured third parties will have a direct right of action against the insurer
- The 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.
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.
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