Coverage Under REIA’s Errors & Omissions Insurance Policy
From time to time, the question arises:
Am I covered under REIA’s (Real Estate Insurance Alliance of Canada Inc.) Errors & Omissions policy for performing an appraisal for a bank or other lending institution for lending purposes, whether or not I have charged a fee for this service?
To answer that question, one must refer to the Errors & Omissions Insurance Policy issued by Trisura Guarantee, which provides coverage for the members of MREA.
The policy states that it provides coverage for Insured members in the rendering or failure to render Professional Services for others.
It defines Professional Services in part as follows: Professional Services means the performance of services customary to a Licensed Real Estate Agent including Real Estate Appraisal Services, however Real Estate Appraisal Services does not include;
- An opinion provided for the purposes of financing, whether secured or unsecured or,
- An opinion provided by anyone with an Appraisal Institute of Canada or Canadian National Association of Real Estate Appraisers designation or,
- An opinion provided, other than for marketing purposes, in exchange for a fee or other form of remuneration.
In the final analysis, REALTORS® are limited by this coverage to provide only opinions of value for the purposes of establishing a listing price for properties they are marketing.