As a REIX subscriber, you likely know you may have coverage for a range of types of claims against you, but you should also know that REIX doesn’t you cover for every type of potential claim that a client might make against you.
You may be wondering what kinds of costs could be involved if someone files a claim alleging an error, omission, or act of negligence, against you? We breakdown a few scenarios to illustrate what you could be facing.
Your REIX Deductible
If REIX does open a claim file on the matter, you may be required to pay a deductible — $5,000 if this is your first claim, or up to $10,000 if you have had a previous claim against you within the last three years. Once we have opened a claim file on the matter, you will need to spend time on a number of activities including:
- providing your documents and information to REIX staff and Defence Counsel
- attending meetings with this team to review the documents and answer questions
- participating in Court proceedings and other meetings
Other Costs
It is important to remember that attendance at these Court proceedings, hearings and Trials is mandatory. So, if you have a vacation or another event scheduled for a date that conflicts with a Court appearance, you will most likely have to reschedule your personal life to attend. This can result in costs for cancelling everything from flights to hotels, etc.
Are there times when REIX coverage does not cover my actions?
There are certain times when your actions fall outside of your REIX coverage including (but not limited to):
- Prejudicing REIX’s position — If you have done anything to prejudice REIX’s position or defense in a claim, you may not have REIX coverage for the claim. This will require you to retain and pay for your own lawyer. An example of this would be if you admitted liability for the alleged error, omission, or negligent act being claimed against you.
- Damages outside of REIX’s coverage — if certain claimed damages fall outside of your REIX coverage, and a Judge finds that you are liable for damages which are directly excluded from REIX coverage, you will be required to pay this yourself. For example, if one of the damages claimed is commissions, and a Judge finds that you are required to pay back your commission, that cost falls on you.
Claims outside of REIX coverage
If the type of claim being made against you falls outside of your REIX coverage, you may be in a position where you need to retain your own lawyer and pay them yourself, plus any amounts to settle the claim. In this last scenario, the costs are difficult to estimate but could easily run into the tens of thousands of dollars.
If you are served with a lawsuit or demand letter, or if you feel an issue is arising in your real estate deal, you’ll need to report your claim to us and contact REIX immediately.