Understanding The Errors And Omissions Requirements For Ontario Mortgage Brokers

Within the province of Ontario, mortgage brokers are required to jump through several hurdles, before they can begin serving the locals. Since Ontario is the most populous province in the entire country, it is truly in your best interest to meet these requirements, so you can access this enormous customer base. One of the most pertinent steps to take is obtaining the appropriate E&O insurance. There are specific requirements for mortgage brokers in this province. These requirements will be explored in greater depth below.

The 2006 Act

The Mortgage Brokerages, Lenders and Administrators Act was passed in 2006. The law makes it a requirement that mortgage brokers have E&O insurance and that the insurance is approved by the Superintendent. These guidelines help to determine the minimum requirements and other acknowledgements. In general, the insurance coverage must be able to pay a minimum of $500,000 for any one occurrence. And, it must cover $1 million for all occurrences during an entire calendar year.

The act also makes it a requirement that the insurance include a “Fraud” endorsement. This helps to protect the public from fraudulent acts. Also, remember that the insurer must provide you with written confirmation of the insurance coverage. Make sure that the policy offered by your insurer has been approved by the FSCO.

Real Estate Council Of Ontario And E&O Insurancemortgage broker insurance requirement

While the Real Estate Council of Ontario, RECO, offers E&O insurance policies to registered real estate brokers, it is important to remember that this does not cover mortgage brokers or administrators. Also, those that have errors and omissions insurance under the Insurance Act or the Registered Insurance Brokers Act are generally not covered for these specific activities. Therefore, mortgage brokers will be required to obtain this type of coverage separately. This is true, even if you already have E&O insurance coverage through RECO.

Understanding E&O Insurance

Now that you’ve learned a little more about the requirements of errors and omissions insurance for mortgage brokers, it is time to delve into the concept of E&O insurance. What is it and how does it work? Errors and Omissions insurance is a specific type of insurance that will greatly protect your company. In general, the insurance is designed to protect you from claims that your company has failed to perform or has been negligent. While some specific professionals need E&O insurance more than others, all can be held liable and therefore can benefit from being covered by this type of insurance.

Why You Need E&O Insurance

The truth of the matter is that anyone can become a target and therefore, you need E&O insurance. And of course, you need to remember that mortgage brokers tend to be at a higher risk than others. This coverage can provide you with protection in terms of legal costs and any payments that you will be required to make to your client. It is essential to remember that the legal costs in Canada can easily bankrupt any company. Therefore, it is absolutely essential to protect your business with this coverage, regardless of the costs!

Canada’s real estate market is continually changing and mortgage brokers are often put under a microscope. Someone in your line of work will receive scrutiny for failing to properly advise the client of their options and even the impact of interest rates. Also, you may be found negligent, if you fail to inform the client of their ability to refinance. With so many potential problems, it is essential to acquire this insurance, so you can sleep soundly at night.

Some Banks Require It

Mortgage brokers work very closely with banks, in order to obtain loans for their clients. Today, many Canadian banks will refuse to work with mortgage brokers, unless they’ve obtained a sufficient amount of Errors and Omissions Insurance Ontario from a Canadian licensed Insurance company. The limitations differ from one bank to another. Therefore, you will need to consult with your bank of choice to figure out your precise requirements. Nonetheless, all mortgage brokers that intend to ply their trade in Ontario will need to obtain E&O insurance first!

Understanding Your Costs

The mass majority of mortgage brokers will be worried about the costs of this type of insurance. This is totally understandable. However, you need to realize that the price of E&O insurance is never universal. Instead, the cost tends to deviate from one professional to the next based on various factors. In general, the most common factors include yearly revenue, number of agents, and your company’s loss history. You should also remember that some businesses will be considered riskier than others. Therefore, mortgage brokers may be required to pay a little more than website developers.

The most definite way to obtain an accurate price is to submit an application and consult with an insurance provider. This will help you get started, while simultaneously allowing you to know precisely how much you will be required to pay.

All About The Contractor License Bonds For Canadian Business Owners

What every business owner in construction field needs to know

If you intend to ply your trade in the country of Canada, you will first need to meet a few prerequisites. Unfortunately, some of these requirements will be a little difficult to fulfill. This is definitely the case when it comes to obtaining a contractor’s license. Unfortunately, it is not possible to simply go online, fill out a form and obtain your license. Instead, you will first need to acquire a license bond. Without the bond, you will not be able to obtain your license and you will be unable to work in the country. You will learn all about this bond below.

How It Works

Many contractors will claim that the contractor license bond is simply another unnecessary hurdle. This couldn’t be further from the truth. In fact, the Canadian government was incredibly wise to make the bond a requirement. And, believe it or not, this prerequisite actually helps your business. By making the bond a necessity, the government has made it slightly more difficult for companies to obtain their license and serve the Canadian public. More specifically, this requirement actually prevents untrustworthy companies from getting a license.

In return, this protects the consumer, since they know to stay away from non-licensed companies. And it also helps your business. When bidding on a new project, you will have less competition and will not have to worry about being undercut by a company that will be unable to finish the job anyway.

license bonding for Contractors

Why Is It Required?

Now, you should understand precisely why the bond is required. Some of this has been explained above, but there is a basic concept at play. The Canadian government utilizes the bond as a way to protect the public. When your company obtains the license bond, you are agreeing that you will obey each and every regulation set for construction contractors. At the same time, the bond gives the government an easy way to punish contractors, which have broken these rules. And again, this goes a long way towards protecting the public.

By knowing their license and the associated bond could be stripped away at any point, contractors are given more encouragement to strive for betterment.

How To Apply

While surety bonds can seem fairly complex to many, getting the bonds you need isn’t all that difficult. In fact, it is possible to apply for your license bond over the Internet. Before doing so, it is pertinent to know the exact amount needed. Be sure to check with your specific province, since the requirements tend to change from location to location. Once you’ve obtained this information, you will be able to apply within a matter of minutes.

Surety Bond Claims – A Comprehensive Guide For Prevention

How to protect yourself and avoid a Surety Bond Claim

If you operate a business within Canada, you will most likely need to familiarize yourself with surety bonds. These bonds are a necessity and you will be unable to offer your services to the public, until you’ve acquired the right bonds. Once you’ve done this and have entered into a bond contract, you’ll want to do your best to satisfy the client. If you do not, you may wind up on the receiving end of a bond claim. Below, you’ll learn all about surety bond claims and will find tips for avoiding them.Construction surety claim

Repercussions Of Claims

If you speak with a Canadian company, which owns surety bonds, they’ll tell you that it is best to avoid claims. This is the case, because bond claims are not only unpredictable, but also they could be devastating to your business. Once the claim has been made, the situation will be out of your hands. The surety will take on the responsibility of overseeing the dispute and declaring a winner. Unfortunately, if you happen to lose, you’re going to be required to forfeit the entire bond amount. This could very well result in the bankruptcy of a small business.

The good news is that there are ways to diminish the potential for claims. Tips for doing so will be provided below.

Work With The Client

Now, you can see that your best course of action is to avoid the surety bond claim at all costs. In order to try and achieve this goal, it is essential to keep the client in the know and try to satisfy them every step of the way. Remember that the client will always have preferences, desires and expectations. Before beginning the work, you should learn about these things and make sure you try to fulfill them to the best of your ability. Never deviate from the client’s preferences you may wind up in trouble.

Work Rapidly

One thing to remember is that the client will want to get the project completed as quickly as possible. It is in your best interest to do so. Of course, you should never rush the process. Make sure you keep the client aware of the progress, by providing them with updates and work on hand documents. This will give them reassurance that progress is being made and that you’re right on schedule to get the job done on time.

Open Communication

Once a contract is initiated between the construction contractor and project owner, the project will begin, by a specified date written in the terms. A completion date is also specified in the terms of the contract, which open communication for it comes to making a dealmeans that the contractor and all other parties involved will need to work diligently to fulfill it. In the meantime, everything is going as planned, but all of a sudden, a malfunctioning crane becomes a major issue.

The contractor will need to oversee the repairs and make sure that it is completed as soon as possible. The longer it takes to get the crane repaired, the longer the project is delayed. Not only will this incident put you at risk of not meeting the deadline, it may end up costing you several thousand dollars. This may compromise the contract, if you did not plan ahead, by having some extra money put aside for emergencies.

If at any time, the principal begins to feel the brunt of the damage, caused by the malfunctioning crane it may be a good time to start communicating with the project owner. Keeping an open door of communication throughout the project will ensure a positive outcome.

Overall

Claims can be devastating and it is best to avoid them at all costs. With this in mind, you should take a proactive stance towards claims. Try to prevent them from escalating and always do your best to stop the surety from getting involved. This will decrease the potential for unexpected losses.

Understanding The Surety Bond – A Complete Beginner’s Guide

Let’s Begin 🙂

There are thousands of Canadians who will have to learn about surety bonds at some point or another. Bonds are utilized for a large number of different purposes and in an array of different situations. Although many do not know it, you do not need to run a business, in order to need a bond. So what precisely is surety bonding and when will it be a necessity? Within this guide, you’ll be able to learn all about Canadian surety bonds.

Definition

In order to fully understand the bond, you should take the time to analyze its definition. The surety is a promise and not considered a type of insurance. Within the bond, the surety agrees to make amends to a second party, if the principal is unable to fulfill their duties.

Understanding The 3 Parties

In surety, there are three parties. Each party is given a name and they include surety, obligee and principal. Below, you’ll find a breakdown of each.

  • Surety – The surety is the group or company, which has issued the surety. They are responsible for handling disputes.
  • Obligee – The surety bond provides protection to the obligee. If the principal is unable to satisfy the initially contractual standards, the obligee will be able to file a complaint with the surety to recover damages.
  • Principal – The principal is required to get the bond. They’ll pay a specific amount of money to acquire the bond and will agree to fulfill their duties according to the contract.

When Is It Used?

Although many people do not know it, surety bonds are widely used throughout the country of Canada. It is true that construction bonds, such as bid bonds and performance bonds, are most common, but the list continues on and on. In fact, the mass majority of professionals within Canada will be required to obtain a license bond, before they’ll be able to acquire their professional license. Also, bonds are commonly used when a company or entity serves the public. And finally, courts often require surety bonds for various reasons.

Construction Bonds

Canadian’s construction industry is currently booming. The surety companies, which offer construction bonds, have seen an increase in visitors as well. This is the case, because contractors almost always need a bond, before they can even secure the rights to a job. In order for contractors to place their bid on a job, they’ll need to secure a bid bond which they can get from an insurance company such as RBC. Once they’ve managed to secure the job, they’ll most likely be required to obtain other bonds, such as performance bonds and supply bonds. The performance bond protects the project owner, while the supply bond is used to protect the companies, which provide materials to the project.

License Bond

If you wish to obtain your professional license, it is most certain you’ll be required to obtain a license bond. The Canadian government has put these guidelines in place, in order to better protect the government and prevent untrustworthy individuals from pretending to be professionals. An array of different professionals will need bonds, such as appraisal companies, auctioneers, automotive deals, and even collection agencies.

Conclusion

Once you’ve better familiarized yourself with surety bonds, you’ll find that they’re not all that difficult or frightening. However, they are diverse and used for many different purposes. Although you may not need a bond now, it is still a good idea to learn about them, because you may be required to do so in the future.