More than 10 per cent of Ontario brokerages are operating without the errors & omissions insurance required by the industry’s governing act, according to FSCO.
Anatol Monid, market regulation branch director of FSCO, told some 400 brokers at the recent IMBA
conference that “we are getting tough on compliance, raising the fines and increasing enforcement… and that goes for all relicensing, the education requirement and E&O.”
Monid pointed out that “more than out of 10 brokerages don’t carry E&O insurance”, and vowed that FSCO will be cracking down in the coming months on compliance issues.
“I’m surprised by that number,” says Paolo Di Petta
, a mortgage agent with EQRON Mortgage. “It can be pretty pricey, yes; maybe that is why the number is so high.”
Di Petta’s brokerage does carry E&O insurance, but points out rates can vary wildly from one insurance carrier to the next.
“I know at my previous brokerage it was $10,000 for E&O insurance was $10,000, whereas now I am paying $1,000 at my current brokerage,” he says. “I know CAAMP
does offer a discount for members, but I was surprised that it was so much more.”
Di Petta feels that what contributes to the high coverage fees is the lack of choice for brokers when looking for insurance.
“There is room for some competition,” he points out. “I think if there were more options, the price would come down, and more brokerages would have coverage.”
Although never having had to use the insurance, Di Petta sees the value in E&O protection when it comes to dealing with clients.
“Sometimes clients can be difficult, and that can’t be helped,” he says. “That is when it is good to have the protection of the errors & omissions coverage.”