What Insurance Does an Ontario Real Estate Registrant Carry? RECO's Three-Part Mandatory Program Explained

Unlike many other professions where liability coverage is voluntary or left to the individual, Ontario’s real estate regulator has built insurance directly into the licensing framework. Under TRESA 2002, participation in RECO’s Professional Liability Insurance Program is a non-negotiable condition of registration. Miss the renewal deadline and your registration is suspended — meaning you cannot legally trade in real estate until the account is settled.

According to RECO, the program is administered by insurance broker Alternative Risk Services, with independent adjuster ClaimsPro managing claims. The annual fee for the 2025–2026 insurance term (September 1, 2025 to August 31, 2026) is $500 per registrant — unchanged since 2022, according to RECO. The program is described by RECO as unique in Canada: no other provincial regulator requires or offers the same set of coverages, particularly Commission Protection.

Coverage 1: Errors & Omissions (E&O) Insurance

E&O insurance is the backbone of the program. It covers a registrant’s professional liability for errors, omissions, or negligence committed in the course of providing real estate services. If a client suffers a financial loss because of a registrant’s mistake — a material fact not disclosed, an offer term handled incorrectly, a clause misinterpreted — and that client pursues a civil claim, E&O responds on the registrant’s behalf.

• Who is covered: All registered salespeople and brokers
• Policy limits (effective September 1, 2025): $2 million per claim (increased from $1 million) and $4 million annually (increased from $3 million), according to RECO
• Tail coverage: According to RECO, E&O insurance continues to protect a registrant after they leave the industry — at no extra cost — for claims arising from activities during their registration period, subject to policy terms

E&O does not cover intentional misconduct or criminal acts. It covers professional mistakes, not deliberate wrongdoing.

Coverage 2: Commission Protection Insurance

This coverage is unique to Ontario — RECO notes that no other province’s regulator offers anything comparable. Commission Protection covers a registrant’s earned commissions when a brokerage fails to pay them due to fraud, misappropriation of funds, or insolvency.

• Trigger events: Brokerage fraud, theft, misappropriation, or insolvency
• Limits: Up to $200,000 per individual per claim, with an aggregate cap of $4 million, according to RECO

Why this matters in practice: In August 2025, iPro Realty Ltd. — one of Ontario’s largest brokerages at the time — disclosed shortfalls of approximately $10.5 million across its consumer deposit and commission trust accounts. According to RECO’s public updates, by February 2026 RECO had processed payments for at least 1,107 commission claims, ultimately committing to 100% payment of all eligible iPro commission protection claims using the insurance program’s stability fund.

That real-world event is precisely what this coverage was designed for. Without Commission Protection, registrants whose brokerage implodes could lose months of earned income with no recourse.

Coverage 3: Consumer Deposit Insurance

This is the only component of RECO’s program that is directly aimed at protecting buyers rather than registrants. When a buyer hands over a deposit to a listing brokerage, that money is legally required to be held in a trust account. Consumer Deposit insurance provides a safety net if the brokerage misappropriates those funds.

• Trigger events: Brokerage theft, fraud, insolvency, or misappropriation of funds
• Coverage limit: Up to $200,000 per consumer per claim; if total claims against one registrant’s occurrence exceed $4 million, individual recoveries may be pro-rated, according to RECO
• Cost to buyers: Zero — this coverage is included at no additional charge, funded through registrant premiums

Important exclusion: According to RECO’s Consumer Deposit FAQ, this coverage does not apply when a deposit is frozen because the buyer and seller cannot agree on its disbursement after a failed transaction. That is a contractual dispute, not a case of fraud — and the insurance responds only to fraud or misappropriation, not to deal breakdowns.

If you suspect a brokerage may be engaging in fraud or misappropriation, RECO advises contacting their Insurance Department immediately at 416-207-4800 or insurance@reco.on.ca.

These are two completely separate insurance products that cover different risk categories. Confusing them is common — and consequential.

• RECO Professional Liability Program — mandatory, regulator-administered, covers professional errors in real estate transactions, earned commissions at risk, and consumer deposits. This is what protects clients from professional mistakes and brokerage failures.
• Brokerage Commercial General Liability (CGL) — voluntarily purchased by the brokerage from a commercial insurer. Covers bodily injury (a visitor slips in the office), property damage, cyber liability, business interruption, and similar commercial risks. This has nothing to do with professional errors in a real estate transaction.

Neither replaces the other. A brokerage that carries excellent CGL coverage but employs a registrant who makes a material disclosure error is not protected from that E&O claim by their CGL policy. Conversely, RECO’s E&O coverage does not respond to a client who trips on a brokerage’s office steps.

For consumers doing due diligence: asking your agent whether they are registered with RECO (and therefore covered under the program) is the relevant question. RECO registration can be verified at reco.on.ca.

RECO’s Consumer Deposit Insurance provides up to $200,000 in protection if your deposit is lost to brokerage fraud or insolvency — at no cost to you. But it only responds to fraud and misappropriation, not to deal fallouts. For routine protection, confirm with your agent that your deposit will be held in the listing brokerage’s real estate trust account, as required by TRESA. You can also verify your agent’s registration status at reco.on.ca before signing anything.

The RECO insurance term runs September 1 to August 31. Failure to renew by the deadline results in immediate suspension of your registration — you cannot legally trade in real estate until the account is brought current. Set a calendar reminder well before the August renewal deadline and complete payment through RECO’s MyWeb portal.

Q: Is RECO insurance mandatory for Ontario real estate agents?

Yes. According to RECO, participation in the Professional Liability Insurance Program is a mandatory condition of registration under the Trust in Real Estate Services Act (TRESA 2002). Every registered salesperson and broker in Ontario must be enrolled — failure to renew on time results in suspension of registration and the legal inability to trade in real estate.

Q: What does RECO's Errors and Omissions insurance cover?

RECO’s E&O insurance covers a registrant’s professional liability for errors, omissions, or negligence made in the course of providing real estate services. Effective September 1, 2025, according to RECO, the coverage limit is $2 million per claim and $4 million annually (increased from $1M/$3M). It also provides tail coverage — protecting registrants for claims arising from their registered activities even after they leave the industry, at no additional cost.

Q: What happens to my real estate deposit if the brokerage goes bankrupt?

RECO’s Consumer Deposit Insurance protects buyers from loss of a deposit due to brokerage theft, fraud, insolvency, or misappropriation of funds. According to RECO, coverage is up to $200,000 per consumer per claim, at no cost to the buyer. However, this insurance does not cover deposits frozen due to a contractual dispute between buyer and seller — it responds only to fraud or misappropriation, not deal breakdowns.

Q: What is Commission Protection Insurance and why is it unique to Ontario?

Commission Protection Insurance reimburses real estate registrants for earned commissions lost because their brokerage committed fraud, misappropriated funds, or became insolvent. According to RECO, coverage is up to $200,000 per registrant per claim, with a $4 million aggregate. RECO notes this coverage is unique in Canada — no other provincial regulator requires or offers it. Its importance was demonstrated in 2025 when iPro Realty disclosed a ~$10.5 million trust account shortfall, triggering the largest commission protection claims payout in the program’s history.

Q: Does RECO insurance cover everything, or do brokerages need separate insurance?

RECO’s program covers professional liability specific to real estate transactions: errors and omissions, commission losses from brokerage failure, and consumer deposit losses. It does not cover commercial risks like bodily injury on the premises, property damage, or cyber incidents. Brokerages typically carry separate Commercial General Liability (CGL) and other business insurance for those risks. The two programs are complementary, not interchangeable.