Advocis Protective Association E&O Plan
IMPORTANT: YOUR E&O RENEWAL NOTICE!
Our records indicate that your professional liability insurance coverage is due for
renewal in April, 2014.
2014-15 APA E&O Program Renewal
Advocis, your industry's professional association, through the Advocis Protective Association (“APA”) and its
broker, Willis Canada Inc., is proud to continue to offer you the tailored Errors & Omissions (“E&O”) protection
that financial advisors need: great coverage, competitively priced!
Advocis Broker Services Inc. Assumes Program Administration Functions
as of January 20, 2014
As per our previous notice to all APA E&O program members, Advocis has formed a new insurance brokerage,
Advocis Broker Services Inc. (“ABS”). ABS will assume all program management functions, replacing Willis
Canada in their capacity as APA Program program administrator. ABS will also take over administration of the
related Corporate E&O coverage offerings.
As indicated in the announcement letter, you can still renew your coverage in the current APA website until close
of business (5 pm EST), Friday, January 17, 2014. The website will then be closed for enrollment until start of
business on Monday, January 20, 2014, at which time APA members will be able to access the new APA website
and to enroll.
Renewing on-line?
To view your quality coverage options and prices, click here: www.apa-ins.ca. Effective January 20, 2014, you
can also access the APA E&O Program at www.realEandO.ca
Renewing off-line (by mail, fax or e-mail)?
Please complete the application attached herewith (if our records indicate that you renew off-line) and return it to
our office (see contact information at the bottom of this notice).
Advocis Protective Association E&O Plan
Coverage C & D Certificate Holders Will Be Able to Renew On-Line
Effective January 20, 2014
On-line enrollment will be available for Coverage C & D certificate holders on or after January 20, 2014 at
the new APA website! At present, C & D certificate holders can only apply for new coverage or renew by paper
application.
2014 Pricing
In order to continue offering a competitive E&O coverage option to protect your practice, it has become necessary
to increase rates to offset the claims paid under the APA Agent’s E&O program. When faced with allegations of
negligence by a client, you can feel assured of the comprehensive protection offered under the APA E&O
Program - it is a critical part of your risk management strategy. Since the principle of insurance is that the losses
of the few are shared by the many, these increased claims costs must be offset with relatively minor rate
increases.
2014-15 rates for Certificate holders carrying policy limits of $1, $2 or $3 million per Claim have been increased
by 5%. Rates of Certificate holders carrying policy limits of $4 & $5 million have been increased by 10%.
All of the existing rating discounts apply to those agents who qualify (please see below for full details).
A case for carrying higher limits
Rate increases for Certificate holders carrying $4 & $5 million insurance limits are higher because claimants
under the program have been successful in winning judgments well in excess of the minimum $1,000,000 limit
being carried by many advisors. Legal costs are escalating and so are judgment awards and indemnity payments.
For this reason, we strongly suggest that advisors look at the higher limit levels when considering their renewal
options. For many life licensed advisors, the automatic choice has been to carry the minimum levels mandated by
life licensed regulators. Your decision as to what insurance limits to carry should be based on a number of factors:
for example, the size of your client portfolio, how long you have been in business, whether you have high net
worth clients, etc.
Helpful hints when renewing your E&O coverage…
1. Don’t Let Your Coverage Lapse!
Important: Your coverage is not renewed automatically! The APA E&O Plan master policy wording, as is
typical with financial advisors’ E&O policies, is “Claims Made”. This means that claims must be made and
reported within the policy term for coverage to respond. Incidents which give rise to a claim made after the
expiry of the policy term, or claims reported after a policy has expired are not covered (refer to master policy for
terms and conditions). This is why it is important to renew your policy without lapse of coverage.
2. Please read the application questions carefully before completing. For Coverage A, B or C applicants,
please read the questions under Step 1B, regarding third party firms and Personal Corporations. For on-line
applicants, please note that whatever you type in these text boxes will appear in your certificate of insurance please type only company names, and nothing else.
3. Corporate Partner & Corporate Sponsor Discount Promotion!
Advocis has teamed up with select business partners to offer a variety of products and services. As part of this
program, contracted and employed agents of these select firms can take advantage of a 10% premium discount
under the APA E & O Plan. The discount is applied as part of the on-line process once the applicants enters the
name of the affiliated firm, along with the Promotion Code provided by the firm to its associated agents.
Advocis Protective Association E&O Plan
4. Sales Tax Changes
BC and PEI Residents
Both the BC and PEI provincial governments ratified changes in sales tax applicable to goods and services for
residents of these provinces effective April 1, 2013.
In BC, the 12% Harmonized Sales Tax (HST) has been replaced by 5% Goods and Services Tax (GST) for British
Columbia residents. The new tax means lower total taxes on certain goods and services which previously
attracted HST. While insurance premiums are not affected by this tax, certain fees associated with insurance
premiums are. Previously, 12% HST was applied to the APA Fee charged for insurance placed under the APA E
& O Plan. For coverage placed in effect on April 1, 2013 or later, 5% GST applies.
In PEI, the 5% GST has been replaced by 14% HST for PEI residents. The new tax means higher total taxes on
certain goods and services which previously attracted HST. Previously, 5% GST was applied to the APA Fee
charged for insurance placed under the APA E & O Plan. For coverage placed in effect on April 1, 2013 or later,
14% GST applies.
Manitoba Residents
The Manitoba government has announced that most commercial insurance policies, including Errors & Omissions
insurance policies, are subject to an increase in the provincial Retail Sales Tax effective July 1, 2013. Effective
July 1, 2013, the tax rate increased from 7% to 8% and applies to coverage placed in effect on or after July 1,
2013.
The tax is applicable to premiums (the program Insurer’s portion of the member’s insurance cost) and the Willis
Broker Fee. HST or GST, depending on province of residence, will continue to apply to the APA Sponsorship Fee.
Zero deductible on Life and Mutual Fund claims continues for 2014-15!
Another reason why the APA Agent’s E&O plan is without parallel! Many competing advisors’ E&O
programs feature either $1,000 or $5,000 deductibles.
For many reasons, the APA E&O Plan is the Canadian financial advisor’s choice:

Price:
o Receive a 5% premium discount for attendance at an Advocis “Protect Your Practice” loss prevention
seminar
o Advisors first licensed in the past two years receive a 15% New Advisor Discount (for advisors licensed
in 2012 or later - contact Willis for details, certain conditions apply) – helping reduce the costs of running
a new practice!
o

Advisors contracted with Corporate Partners/Corporate Sponsors receive a 10% premium discount
Coverage:
o Zero deductible for Coverage A and D certificate holders (Life and Mutual Fund claims)! You’ve already
paid for your E&O insurance – why pay again when you make a claim?
o Limits as high as $5 million each Claim for advisors who want to bullet-proof their growing practice, and
see their insurance coverage as more than regulatory compliance
o Coverage D applicants (Licensed Assistants) can purchase $2 million each Claim for a nominal additional
charge above the $1 million limit option
o Aggregate insurance limits for program participants licensed only in non-regulated provinces (for Life
insurance) have been increased from $1 million Aggregate (per policy period) to $2 million at no
additional charge
Advocis Protective Association E&O Plan
o Vicarious liability coverage is automatically extended to cover third party firms with whom insured
advisors do business and are affiliated through an employee-employer or agent-agency relationship
(included as a “firm” under the APA E&O master policy). This extends to insured advisors’ incorporated
firms through which covered financial services are provided (note: this is not the same as having your
“Personal Corporation” added as an Insured under your certificate of insurance, nor as comprehensive as
carrying separate Corporate E&O coverage – see below for more details)

Leverage: participation in a pool of several thousand advisors, one of the largest of its kind, means the best
possible pricing and coverage based on the program’s favourable loss experience

Strength: coverage by Liberty Mutual, an “A” (Excellent) rated insurer (A.M. Best & Co.) means claims will
paid even when times are tough

Advice: you can call ClaimsPro, our Claims management provider, for professional advice should you have
concerns about a potential claim being brought against you – their highly skilled legal professionals can guide
you and suggest the next steps to mitigate a situation with an unhappy client
Support: membership in a non-profit association (APA) that exists solely to facilitate protection for financial
advisors. The APA E&O Plan was designed and implemented by advisors, for advisors! You can read about the
APA at the APSA website: www.apa-ins.ca
Renew on-line and Save!
By renewing on-line, you can:




Save $50
Pay by credit card (and enjoy the loyalty benefits of your card!)
Have your renewal processed in minutes
Receive your insurance certificate, the master policy wording and your payment receipt right away
To renew on-line, log on to www.apa-ins.ca and renew your quality coverage!
To renew off-line:
Applicants renewing off-line can either submit the attached application or visit the APA website to download the
applicable application form.
For technical matters specific to your renewal application and coverage, please refer to the contact information
below.
Do you have suggestions on how to improve then APA E&O Plan? Please contact the Advocis member services
team at 416-444-5251 or 1-800-563-5822.
More Important Information about Your E&O Insurance
You Still Need Coverage if You Are Retiring or Planning to Cease Practice
If you are planning to retire, have already retired, or have otherwise ceased your practice (and are, or will no
longer be, licensed for your business activities), don’t just let your policy lapse!
You may qualify for an Extended Reporting Period (“ERP”), to cover the possibility of future claims based on
errors or omissions alleged to have occurred prior to cessation of your practice. You can select an ERP
extension from one year to six years in length (the limit of coverage must be the same as that carried under your
current policy) – premiums vary according to the ERP period you select (an automatic ERP is mandated within
Advocis Protective Association E&O Plan
the policy at no extra charge for advisors licensed as follows: Quebec and Manitoba, 5 years; Alberta, 1 year –
this extended coverage only applies for life licensed activities governed by the regulator in the applicable
province).
If you are planning on ceasing practice or have already done so…
Your exposure to claims does not end when you cease practice. But your E& O insurance does if you cancel or
non-renew! You can extend the period of time during which claims may be made and covered following cessation
of practice. Find out about “Extended Reporting Period” (ERP) options at the APA website. You can download an
Extended Reporting Period application in the site. For paper applications, you can call to be mailed, faxed or emailed an application.
Don’t wait! You only have up to sixty (60) days past expiry of your certificate of insurance to apply for one
of the ERP options.
Adapt Your E&O Insurance Strategy as Your Business Grows
Has your business grown in the past five years? Has your E&O coverage kept up? The APA E&O Plan offers
coverage up to $5,000,000 each Claim – make sure you continue to adequately protect your business by
purchasing the right amount of E&O insurance.
Exempt Products Coverage
Advisors registered as an Exempt Market Dealing Representative for sales of Exempt Products by a provincial
securities commission can add coverage as described below.
Covered products: Include Linked Notes, Principal Protected Notes, Structured Notes, Labour Sponsored
Funds, Flow Through Shares, Hedge Funds and any products exempt from the prospectus requirement as
determined in the Securities Act in each applicable province.
(a) Exempt Products Coverage under Coverage A (Life/Mutual Funds)
Eligibility: Life, Accident Sickness and or Mutual Fund licensed advisors who are also Exempt Market Dealing
Representatives wishing to include coverage for Exempt Products coverage.
Available liability limits: Advisors carrying Coverage A who contract with APA Plan Approved Exempt Market
Dealers * can purchase limits of insurance for Exempt Products for either $1,000,000 each Claim/$2,000,000 per
Policy Period, $2,000,000 each Claim/$2,000,000 per Policy Period or $3,000,000 each Claim/$3,000,000 per
Policy Period (limits selected cannot exceed the limits of insurance you carry for Coverage A). Coverage is part
of, and not in addition to your coverage limits purchased for Coverage A.
Advisors carrying Coverage A who contract with APA Plan Non-Approved Exempt Market Dealers * can
purchase limits of insurance for Exempt Products for either $250,000 each Claim/$500,000 per Policy Period or
$500,000 each Claim/$1,000,000 per Policy Period. Coverage is part of, and not in addition to your coverage
limits purchased for Coverage A.
Deductible: $5,000 each Claim.
Pricing: Listed in the application form and as described in the APA website.
(b) Exempt Products Coverage under Coverage B (Securities)
Eligibility: IIROC registrants who are also Exempt Market Dealing Representatives wishing to include coverage
for sales of Exempt Products coverage.
Available liability limits: Advisors carrying Coverage B who contract with APA Plan Approved Exempt Market
Dealers * can purchase limits of insurance for Exempt Products for between $1,000,000 each Claim/$1,000,000
per Policy Period to $5,000,000 each Claim/$5,000,000 per Policy Period (limits selected cannot exceed the limits
of insurance you carry for Coverage B). Coverage is part of, and not in addition to your coverage limits purchased
for Coverage B.
Advocis Protective Association E&O Plan
Advisors carrying Coverage A who contract with APA Plan Non-Approved Exempt Market Dealers* can
purchase limits of insurance for Exempt Products for either $250,000 each Claim/$500,000 per Policy Period or
$500,000 each Claim/$1,000,000 per Policy Period. Coverage is part of, and not in addition to your coverage
limits purchased for Coverage A.
Deductible: $5,000 each Claim.
Pricing: Listed in the application form and as described in the APA website. Advisors contracted with APA Plan
Approved Exempt Market Dealers pay no additional premium!
As a minimum requirement, applicants must also be Life and or Mutual Fund licensed and or IIROC
registrants.
On-line applicants: If you are renewing your coverage on-line, you are an Exempt Products Dealing
Representative selling through an Exempt Market Dealer, and wish to add or renew Exempt Products coverage,
please note that this option is not currently available on line (check with Advocis Broker Services on or
after January 20 for on-line options). You can renew your Coverage A or B coverage on-line and submit a
paper application for Exempt Products coverage to Willis until January 17; or, as of January 20, renew both A or B
and Exempt Products coverage on-line through the new website. You can find information about Exempt Products
at the APA website, or call for an application to be mailed, faxed or e-mailed to you.
* APA Plan approved listed EMD’s are listed in the Exempt Products application forms. If your Exempt
Market Dealer would you like become APA Plan approved, please inquire (dealer approval is at no cost or
obligation and is subject an underwriting review by the APA E&O Program insurer).
Is Your Firm Protected? Consider Corporate E&O Insurance!
If you own your own firm, you should consider the APA Small Corporate Errors & Omissions program
Your individual Agent’s E&O coverage may not adequately protect your firm! Under certain APA E&O Plan
underwriting guidelines, your firm may qualify as a “Personal Corporation” and may be eligible to be added to your
Agent’s E&O certificate at no cost).. If your firm does not qualify, then we recommend considering the purchase
of separate coverage for your firm.
Not only are advisors exposed to claims alleging negligence, but life agencies, financial planners, investment
firms, mutual fund dealers, MGA’s, AGA’s, etc. are also exposed. The vicarious liability provisions included in
advisors’ E&O insurance policies do not respond to the direct liabilities such as allegations of negligent hiring,
supervision and training, and compliance-related diligence.
Don’t leave your corporate assets exposed! If you own your own firm and you don’t carry Corporate E&O
insurance, your business and everything you’ve worked for are, in fact, exposed, regardless of how prudent your
own internal risk management practices are! Litigation lawyers can charge over $500 an hour. Consider the
cost of this policy as hiring a lawyer at a discount!
Did you know that the regulatory bodies in ON, QC, AB, BC, SK & NL require life licensed agencies to carry
Corporate E&O insurance (note: the LICS in Saskatchewan requires dedicated Corporate E&O policies for all
corporately licensed Life insurance agencies registered in Saskatchewan)?
The APA Small Corporate E&O program coverage will satisfy provincial regulatory requirements and help you
protect your corporation. Regulated or not, don’t overlook this important risk management strategy to protect your
business!
Costs start as low as $600 for Ontario domiciled companies and as low as $400 for Quebec, and for provinces
and territories where life insurance is unregulated (maximum three licensed staff; up to six licensed staff eligible at
higher cost (certain conditions apply; provincial taxes and GST or HST applicable depending on domicile).
Details of the APA Small Corporate E&O program are described in the APA website.
On-line applicants: please note that Corporate E&O insurance is not available for purchase on-line. You can
download an APA Small Corporate E&O application at the APA website, or call for an application to be mailed,
faxed or e-mailed to you.
Advocis Protective Association E&O Plan
Contact Information
Willis Canada - Until close of Business 5 pm EST, Friday, January 17, 2014:
Telephone:
E-mail:
416-646-9888 or toll-free at 1-877-646-9888
[email protected]
Facsimile:
Website:
416-646-9887 or toll-free at 1-866-646-9887
www.apa-ins.ca
Advocis Broker Services Inc. - Effective Monday, January 20, 2014:
Telephone:
E-mail:
Facsimile:
Website:
416-646-9888 or toll-free at 1-877-646-9888
[email protected] or [email protected]
416-444-8031
www.realEandO.ca
Thank you for your business and we would like to extend our welcome to Advocis Broker Services as a new
partner serving you in the protection of your practise!
Yours truly,
WILLIS CANADA INC.
APA Professional Services Group
Group Solutions
1200-145 King Street West
Toronto, Ontario M5H 1J8
Errors & Omissions coverage dedicated to financial advisors
APA® is a trademark of The Advocis Protective Association. The APA is a wholly owned subsidiary of Advocis®. Copyright © 2013 The Financial
Advisors Association of Canada. All rights reserved. Unauthorized reproduction of any images or content without permission is prohibited.