Errors & omissions (E&O) insurance is the mandatory professional-liability coverage every Ontario registrant carries, paying defence, damages and settlement costs above a deductible when a mistake made in the course of trading in real estate is challenged.
RECO's professional liability program states the figures directly: a “$2,000,000” per-claim limit, a “$4,000,000” annual aggregate, and a “$2,500 (damages only)” deductible, rising $2,500 for each additional claim paid within a three-year period. It responds to the ordinary mistakes of the job: “forgetting a key clause in the APS,” a tax-related error, using the wrong form, or under- or overpricing a property” — and it covers defence costs even against a groundless accusation that is ultimately dismissed. What E&O does not cover — fines, penalties, or intentional acts — is not spelled out on RECO's page, so that specific exclusion should be confirmed with the registrant's own broker, not assumed.
Two adjacent coverages are easy to confuse with E&O and are not the same thing. Commission Protection responds when the registrant's own commission is stolen, misappropriated or lost to insolvency or social-engineering fraud — a “$200,000” per-claim limit against a $4,000,000 per-event cap, with a $250 deductible. Consumer deposit insurance is different again — it protects the client's deposit, not the registrant's commission or the registrant's own liability.
An agent uses an outdated disclosure form on a resale condo, and the buyer later sues for $40,000, alleging the wrong form caused an active special assessment to go unmentioned. E&O responds: defence costs plus any damages above the $2,500 deductible, up to the $2,000,000 per-claim limit. If instead the brokerage's bookkeeper had stolen the same buyer's deposit, that is not an E&O claim at all — it is a consumer deposit insurance claim, a different coverage responding to a different loss.
See also: Consumer deposit insurance, Discipline decision, the full glossary.
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