New mortgage brokerage insurance requirements

Published August 11, 2026

Licensees who do business with mortgage brokerages in BC should be aware of new errors and omissions (E&O) requirements coming into effect October 13, 2026, for mortgage brokerage insurance.

The new Mortgage Services Act (MSA) is coming into effect in October and will replace the existing Mortgage Brokers Act. The MSA Rules and Regulation will support the implementation of the Act, which stipulates the new E&O insurance requirements.

Under section 62(1) of the MSA Rules, a mortgage brokerage must maintain E&O insurance with extended coverage for loss resulting from fraudulent acts. Minimum coverage amounts for E&O insurance are set out in section 62(2) of the Rules.
 

Minimum coverage amounts

A mortgage brokerage must maintain E&O insurance with extended coverage of at least:

• $500,000 for any one incident involving the brokerage, a principal broker or a mortgage broker, and
• $1 million for all incidents in a 365-day period involving the mortgage brokerage or any related principal broker or mortgage broker.

Three years of tail coverage

Coverage must remain in place while the brokerage is licensed and for a three-year “tail coverage” period after the brokerage:

• merges or winds up; or
• has its licence cancelled or suspended.

The E&O policy must cover every type of mortgage service the brokerage is licensed to provide, such as dealing, trading, administering or lending.
 

Brokerages operating in multiple jurisdictions

Mortgage brokerages that conduct insurance business in multiple jurisdictions must ensure that they maintain sufficient E&O insurance, meeting the minimum coverage required in each province where they are licensed to do business. Specifically:

• Claims in one province must not erode the minimum coverage in another province.
• Each licensed mortgage brokerage must have its own coverage and must not share coverage with another licensed brokerage, even if the brokerages are related or affiliated.

More information on the new requirements and legislation can be found on BCFSA’s website: ​​Mortgage Brokerage Insurance Requirements​ | BCFSA