We get that insurance can be confusing and might even sound like a different language sometimes. We’re here to help, so let’s start with some of the basics.
- Commercial General Liability: This is commonly abbreviated to CGL. A CGL policy is designed to cover allegations of third party Property Damage or Bodily Injury resulting from your negligence. A couple of common examples that we see under this program are slips and falls at an open house or accidentally leaving a window open and pipes burst. This policy will pay for the defence if an allegation is brought against you, and damages that you are legally liable to pay.
- Errors & Omissions: This is commonly referred to as E&O. This coverage is mandatory through your real estate board and covers financial loss to a third party caused by either an Error (doing something wrong) or Omission (failing to do something that you should have done).
- Negligence: As mentioned above, insurance policies are triggered if you are found to be negligent. This means that you either did something that a reasonable and prudent person wouldn’t do, or failed to do something that a reasonable and prudent person would do. The courts generally look at three factors to determine this. First off they will determine if you had a duty of care to the third party. As a real estate agent, you have a duty to your clients to keep them and their property safe. Second, they will determine if that duty was breached. Finally, they will determine if your actions were the direct cause of the damages being claimed. For example, if you are showing a client’s home, you have a duty to that client to protect their property from physical damage. If you breach that duty by forgetting to lock the door and a stranger comes in and vandalizes their home, it could be determined that you have been negligent.
- Aggregate: This is the total amount that the insurance company will pay over the term of the policy. There can be an aggregate for a certain type of coverage or for the entire policy. Many policies will have a general aggregate which limits the amount the insurance company will pay for all liability claims over the policy term. If your policy has a general aggregate of $5,000,000 and you have one large claim that exceeds that amount, any claim for the remainder of the term will not be paid. Our RealProSure policy does not have a general aggregate.
- Deductible: This is the amount the insured is responsible for paying in the event of a claim. Under the RealProSure program the deductible for Property Damage claims is $1,000 and the deductible for Bodily Injury claims is $0.
If you have any questions about your insurance policy or any of the terminology please contact Adam Thomson at firstname.lastname@example.org or 403-209-5447.