Member Insurance Program
In September 2018, IBAS entered into a service agreement with Sage Advisor Resources, a for-profit subsidiary of the Insurance Brokers Association of Alberta (IBAA), to deliver the association’s member insurance program.
This partnership allowed policyholders who purchased insurance under IBAS’s previous for-profit corporation, IBCO Services Ltd., to continue their coverage through Swiss Re (formerly Westport Insurance Corporation), while having access to a full-service team of licensed advisors.
Errors & Omissions Insurance
Like every provincial broker association across Canada, IBAS offers — through a licensed partner — E&O insurance as an exclusive member service. There are three main reasons members choose Sage Advisor Resources for their E&O needs:
- Affordable, superior coverage options from both a carrier and program administrator that know the brokerage business inside and out;
- Any commission earned supports the important work of IBAS, and reduces the association’s dependency on membership dues; and
- Sensitive brokerage information required for enrolling in E&O insurance, such as finances, remains with a trusted, neutral third-party.
More than 75% of IBAS members already take advantage of this program.
Directors & Officers Insurance
In September 2019, Sage Advisor Resources began offering D&O coverage, including fiduciary liability protection, to IBAS members. This offering is designed to complement the popular E&O coverage, and is available only to brokerages that also hold an E&O policy through the IBAS Member Insurance Program.
Premiums start at $1,200 for $1 million of indemnity coverage, with a separate $1 million dedicated limit for legal defence expenses. The maximum indemnity limit offered is $5 million and the expense limit maximum is set at $2 million.
Here are a few reasons why D&O coverage for brokerages is so important:
- Personal Wealth Protection: Directors and officers can be held personally liable for claims and, therefore, risk their individual financial security. D&O insurance can protect the personal assets of directors and officers, their spouses, and estates. Often, company assets are closely tied to the personal wealth of management, making protection for claims brought against the entity extremely vital.
- Indemnification Supplement: An organization’s bylaws may state that the company shall indemnify its directors and officers, but that does not guarantee the entity will have the resources to do so. Further, the entity may not legally be able to indemnify directors and officers even if the resources are available. When a company cannot indemnify its directors and officers, D&O insurance can step in instead.
- Balance Sheet Protection: Allegations against directors and officers can be costly, even when they are frivolous, unfounded, or lack merit. Complex claims, such as shareholder suits, anti-trust allegations, and merger objection claims can generate sky-high defense and settlement costs that could have a negative impact on the firm’s financial profile and viability to continue as a going concern. A D&O policy can absorb these types of costs.
- Vast Potential Claimant Pool: Directors and officers can be sued by shareholders, competitors, creditors, customers, and employees. Moreover, claimants can include federal and provincial agencies who can initiate investigations that have the potential to generate a host of issues ranging from large defence costs to unflattering publicity and negative effects on a company’s brand.
- Bankruptcy/Insolvency Protection: During an economic or industry down-cycle, there is potential for bankruptcy resulting in creditor suits and bankruptcy trustee claims against board members. Claimants can seek restitution at the expense of the individual director or officer. When a company is insolvent and can’t indemnify the board, a D&O insurance policy is the last line of defence for directors and officers.
- Talent Acquisition: Securing D&O coverage helps attract talent for outside and/or new board members, as these individuals will know they are protected. With D&O insurance in place, the leadership team can focus on managing operations rather than managing disruptive and, perhaps, lengthy litigation.
- Affordability: D&O insurance is very affordable insurance when compared to the cost of defending litigation and paying settlement values, which can be expensive.
Sage Advisor Resources offers an exclusive cyber insurance program for IBAS members, delivered in partnership with APRIL Canada and AXIS. There are two limit options — $1 million and $2 million (aggregate and per incident, except where outlined below) — with the following coverages:
- Enterprise security event liability:
- Media liability
- Privacy regulation;
- Crisis management expense;
- Fraud response expense;
- Public relations expense;
- Forensic and legal expense;
- Extortion/ransomware loss;
- Business interruption;
- Data recovery;
- PCI fines;
- Social engineering fraud ($100,000 and $200,000 limits only);
- Telecommunication expense ($100,000 and $200,000 limits only); and
- Reputational loss
The cost of the policy is based on your annual commission revenue and the limit option you prefer. The cyber carrier will endorse the policy to add a 'bricking' endorsement with a $100,000 limit for an additional premium of $100. Please let your Sage Advisor Resources representative know if you would like this added to your policy.
What is bricking? Cyber policies historically excluded coverage for damaged computer hardware. Bricking refers to a loss of use or functionality of hardware (such as servers) as a result of a hacking event. While malicious software may be removed, hardware may still be considered untrustworthy and require replacement. This coverage provides for the cost to replace such affected hardware.
IBAS's Member Insurance Program is administered and delivered entirely by Sage Advisor Resources, which is licensed in the Province of Saskatchewan. IBAS generates revenue from this program through two distinct streams:
- Sage Advisor Resources shares a portion of all earned commissions with IBAS in the form of a marketing sponsorship; and
- Swiss Re makes an annual sponsorship contribution directly to IBAS based on a formula similar to contingent profit commission (E&O and D&O book of business only).
Get a Quote
Get a free, no-obligation quote by calling Sage Advisor Resources at 1-587-921-7695 or toll-free at 1-800-318-0197 ext. 100.