Questions & Answers, 2005 Insurance Policy Year, Page 1 of 11
QUESTIONS AND ANSWERS
Insurance Policy Period January 1, 2005 through January 1, 2006
ANSWERS TO QUESTIONS MOST FREQUENTLY ASKED ABOUT THE
NATIONAL ASSOCIATION OF REALTORS®
PROFESSIONAL LIABILITY INSURANCE
PROGRAM FOR ASSOCIATIONS OF REALTORS®
Quick Reference - What’s New?
How does the 2005 NAR Professional Liability Policy differ from the 2004 policy?
The changes below were made this year or in recent years. The insurance carrier remains Illinois National, which is a
wholly-owned subsidiary of American International Group (AIG). The administrator of the program is Aon Risk
Services.
Changes Made in 2005
 Third Party Computer Attack Coverage : The definition of Wrongful Act has been expanded to include “Computer
Attacks” to third parties resulting directly from the rendering of services as an Association. (discussed in more detail in
Questions 17, 18 and 28).
 Network Security Endorsement: In addition, Associations will have the opportunity to purchase expanded liability
and first party coverage for “Computer Attacks” via the Network Security Endorsement. The two coverages provided
under this endorsement are Security Liability and Information Asset Coverage.

Security Liability Coverage provides coverage for claims arising out of a failure of the Insured’s security resulting in
computer attacks, unauthorized use or access, misappropriation and/or disclosure of confidential or private information,
transmission of a computer virus or denial of service. Please note that this coverage option differs from coverage
provided under the master policy as it relates to the failure of the Insured’s network security. (This coverage is written
on a claims-made basis. Please refer to Network Security Application for further detail.)
Information Asset Coverage provides coverage for losses involving electronic data and information assets. If the
Association’s network security fails and data is corrupted, damaged or destroyed the expenses the Association incurs
to recover or recreate the data would be covered under this option. (This coverage is written on an occurrence basis.
Please refer to Network Security Application for further detail.)
**Coverage offered under the Network Security Endorsement will incept on April 1, 2005 and expire on April 1, 2006.**
WITH RESPECT TO COVERAGE AFFORDED UNDER THE NETWORK SECURITY ENDORSEMENT, THE LIMIT OF LIABILITY PURCHASED
SHALL BE IN ADDITION TO, AND NOT PART OF THE $20,000,000 AGGREGATE LIMIT OF LIABILITY.
Questions & Answers, 2005 Insurance Policy Year, Page 2 of 11
Administrative Reminders
 Defense & Settlement, Choice of Counsel: As in the past, the Insured will still maintain ultimate control over
choice of counsel. If an Insured chooses to work with its own counsel who is not part of AIG’s approved list of
attorneys “panel attorneys”, however, AIG will negotiate rates with that law firm if their rates are higher than
AIG’s approved rates for panel attorneys in that area. For most cases, if rates are in excess of 40% above panel
attorney rates in that area, the Insured may be requested to contribute toward the difference. For those cases
handled in the Complex Claims Unit, which would include antitrust claims, if rates are in excess of 65% above
panel attorney rates in that area, the Insured may be requested to contribute toward the difference.
 Compliance with NAR policy: Mandatory policy changes effective January 1 must be in place by October 31
in order to be considered in compliance for insurance coverage purposes. An exception to this rule is granted if
an association’s annual meeting is in November or December. In that case, mandatory changes must be adopted
at that meeting. Please see the enclosed insert “Help! The Association has been sued or someone has threatened
to sue. What should I do?” for more information.
 Timing of Claims Submission: As soon as you become aware of a problem, which may escalate into a lawsuit
or are sued, immediately contact American International Group and send a copy of any correspondence to NAR
and AON RISK SERVICES. Additionally, the insurance policy states that "the Association, Directors, Officers
and staff shall not assume any obligations, incur any costs, charges, or expenses or enter into any settlement
without the Company's written consent". An Insured under this program should not incur any costs or settle any
claims without obtaining written consent from the carrier. Note: Failure by either you or your law firm to
notify AIG immediately of a lawsuit may jeopardize your coverage and result in the denial of costs.
Please read the insurance packet carefully to understand the 2005 policy and contact Gayle Andrews at Aon Risk
Services (312-381-7049) or via email to Gayle_Andrews@ars.aon.com) or Tim Gallagher at Aon Risk Services (312381-7048) or via e-mail to Tim_Gallagher@asc.aon.com) if you have questions or need clarification. If they are not
available, please contact Mary Stark-Hood at NAR (312-329-8374) or via e-mail to mstarkhood@realtors.org).
Questions & Answers, 2005 Insurance Policy Year, Page 3 of 11
PLEASE NOTE:
IF THERE IS A CONFLICT BETWEEN POLICY LANGUAGE AND ANY INFORMATION
PROVIDED IN THE FOLLOWING QUESTIONS AND ANSWERS, THE POLICY LANGUAGE SHALL CONTROL.
1. Q: What types of insurance does the NATIONAL ASSOCIATION OF REALTORS® provide under its
insurance program?
A: Professional Liability (Errors & Omissions and Directors & Officers) Insurance. Please note that the policy does not
provide coverage for events hosted by Associations or MLSs or coverage for buildings and their contents. In order
to obtain those types of coverages, you would need to secure a special event policy along with property and general
liability policies.
2. Q: What is the objective in providing this insurance policy?
A: The objective is to provide the National Association and its constituent Associations with coverage against losses
and/or claims expenses arising out of claims challenging the procedures or operations of the NATIONAL
ASSOCIATION OF REALTORS® and Associations of REALTORS® when functioning as real estate trade
associations.
3. Q: Is there coverage for Directors and Officers? For Association staff?
A: YES! Coverage is provided for Directors and Officers, volunteers and staff of Associations, if acting within their
scope of authority on behalf of the Association. Please note that individuals performing work for the Association
who are leased to the Association by a leasing company or employed by another company but working at the
Association on a contract basis are not covered by this policy. The leasing or other company should provide those
individuals with an errors and omissions policy while they perform work for the Association. Associations also are
able to purchase coverage for leased employees through the flex plan relating to additional coverages. Please see
Question 26 for additional information.
4. Q: Does the National Association's Professional Liability Insurance Policy automatically cover all state and local
Associations?
A: NO! Coverage is extended only to those Associations that have a letter on file from the Member Policy Department
indicating that their governing documents and operations conform to the Constitution and Bylaws of the National
Association and the policies adopted, and amended from time to time, by the Board of Directors of the National
Association.
Documents to be reviewed and approved by the Member Policy Department when mandatory changes are made to
NAR policy include:




Association Bylaws
MLS Rules and Regulations
MLS Bylaws (if the MLS is a separate corporation)
Confirmation that the Association has adopted NAR’s Code of Ethics and Arbitration Manual and that
Association counsel has certified that it is consistent with state law. If State Association counsel has certified that
NAR’s Code of Ethics and Arbitration Manual is consistent with state law, or if the Association has adopted NAR’s
Code of Ethics and Arbitration Manual as revised by the State Association to conform with state law, written
notification of this fact will suffice. If the Association adopts procedures contrary to NAR’s Code of Ethics and
Arbitration Manual, these differences must be identified and the Association must indicate which (if any) of these
differences are mandated by state law.
Questions & Answers, 2005 Insurance Policy Year, Page 4 of 11
As a condition for any coverage under this insurance program, the Member Policy Department must review
any rules, regulations or policies of the Association that affect determination of Association membership or
that impact NAR's Constitution, Bylaws, Code of Ethics, Standards of Practice or policies as adopted by the
Board of Directors. The above documents must all be in compliance for there to be any coverage under the
Professional Liability Insurance Program.
In addition, further affirmative steps must be taken by an Association before coverage is available in two
sections under Insuring Clause IB:

Associations must implement and adhere to the lock box security requirements promulgated by NAR for
Association-operated lock box systems in order to have claims expense coverage for lock box claims.

Associations must adopt and follow NAR's Employer/Employee Guidelines in order to have claims expense
coverage for employer/employee lawsuits. It is not necessary for an association to send its employment handbook
to NAR for examination. In the event a claim is filed, the insurance company may request verification that the
guidelines were followed when disciplining or terminating an employee.
Failure of the Association to take the necessary steps to invoke coverage in the above two sections (lock
box and employer/employee claims) will not jeopardize other coverage under the policy.
Both the Lock Box Security Requirements and the Employer/Employee guidelines are available on realtor.org under
the “Law and Policy” tab. In the section titled “NAR Legal Resources”, click on “NAR’s Professional Liability
Insurance Program” and scroll to the bottom of the page where you will find an attachment to the Lock Box Security
Requirements (Section 7.31 of the Handbook on Multiple Listing Policy) and a link to the Employer/Employee
Guidelines.
5. Q: Where should governing documents be sent for review to ensure that they are in compliance?
A: Your Association’s Bylaws, MLS Rules and Regulations and MLS Bylaws should be sent to Member Policy,
NATIONAL ASSOCIATION OF REALTORS®, 430 N. Michigan Ave., Chicago, IL 60611.
6. Q: What is the cost of this insurance coverage to an Association?
A: The annual premium is paid by the National Association. There is an extra charge if an Association elects to
purchase excess insurance or to participate in the flex plan program. Please see Questions 24 through 29 for more
information on excess insurance and the flex plan program.
7. Q: What kinds of claims are covered under the Professional Liability Insurance Policy?
A: Insuring Clause IA provides coverage for wrongful acts, personal injury or publisher’s liability (which includes
trademark infringement) for claims resulting from providing membership services and the carrying on of other
activities usual to a real estate trade association. Insuring Clause IA should be consulted for specific coverage
questions. For example, certain claims arising out of the providing of professional services to members (e.g.
Professional Standards enforcement, arbitration, new membership processing, Multiple Listing Services, “Computer
Attacks” to a third party resulting directly from the rendering of services as an Association) are covered (subject to
policy deductibles and limits), as are claims for libel or slander.
Insuring Clause IB provides coverage in eight areas for only attorney fees and costs (not liability) of the
Association. The eight areas are: (1) lock box claims, if the lock box security requirements are followed; (2)
antitrust and restraint of trade; (3) civil rights and fair housing; (4) sexual harassment claims; (5) employment
practices claims if the Employer/Employee Guidelines are followed; (6) claims relating to trademark and copyright
infringement of a MLS system; (7) claims arising out of the NAR Dispute Resolution System or the Counselors of
Real Estate Dispute Resolution System when an insured Association functions as the mediation/arbitration service
provider rather than referring cases to a third party mediation/arbitration provider; and (8) breach of contract claims.
Questions & Answers, 2005 Insurance Policy Year, Page 5 of 11
8. Q: Are regional Multiple Listing Services covered under the policy?
A: YES! Claims arising out of the operation of a Multiple Listing Service which is jointly owned and operated by two
(2) or more Associations are covered. This means that MLSs are insureds, and that coverage no longer flows
through the shareholder association. When a claim is filed against a regional multiple listing service, the governing
documents of the regional MLS must be in compliance with NAR policy. This is a pre-condition to coverage for the
MLS. The compliance status of the shareholder associations will not impact the MLS’ coverage.
9. Q: Is there coverage for state or regional entities functioning in a multi-Association management/service
capacity?
A: YES! Coverage is provided to state or regional entities that undertake management/service activities for a number
of local Associations as long as the entity's governing documents comply with the National Association's policies
and procedures.
10. Q: Are members of a Professional Standards Committee who are named as defendants in a lawsuit based on
actions taken by the Professional Standards Committee covered?
A: YES! The coverage provided under the policy extends to those who serve in the capacity of committee chairmen or
committee members, officers, directors and employees of the Association if acting within their scope of authority on
behalf of the Association.
11. Q: Does the insurance provided to committee chairmen and committee members extend to their own real estate
brokerage activities?
A: NO! The insurance policy does not provide coverage for a member's brokerage activities or real estate firm
operations.
12. Q: If an Association is found to have violated antitrust laws and is required to pay damages, will this insurance
cover the damages?
A: NO! There is no coverage under the policy for antitrust damages. The coverage is only for the costs incurred by
the Association in defending itself, and then only up to the stated limits. The actual defense costs paid will be
limited to costs incurred by the attorney or law firm appointed by the insurance company to defend the case and
other claims expense which have been authorized or approved in advance by the insurance company.
Please note that the sub-limit for antitrust claims is $500,000.
13. Q: Is there any coverage provided for civil rights violation claims?
A: YES! However, the coverage provided is only for the cost of defense, as in the case of antitrust coverage.
14. Q: Is there any coverage for lawsuits brought against an Association arising out of the Association's operation of
a lock box system?
A: YES! Specific provision is made for coverage of defense costs of the Association, but not keyholders, up to the
applicable limit. This coverage is only available to Associations that have implemented and are adhering to the lock
box security requirements promulgated by the National Association for Association operated lock box systems.
Please note that if an Association chooses to sell lock boxes to its members, it could affect lock box coverage,
depending on the Association's continuing role in administering the system and its ability to comply with the lock
box security requirements.
Questions & Answers, 2005 Insurance Policy Year, Page 6 of 11
15. Q: Is any coverage provided for employer/employee claims?
A: YES! Defense costs coverage is available for lawsuits against the Association and its Directors, Officers or Staff
arising from hiring, firing, compensation, employee privileges or other terms of employment, up to the applicable
limit, if the Association has adopted and follows the Employer/Employee Guidelines promulgated by the National
Association. In the event a lawsuit is brought against an Association which alleges both discrimination and
wrongful termination, only one limit will apply. Employment Practices Liability Coverage is available for
Employment Practices Claims. See Question 27 for further detail.
16. Q: Does Exclusion K mean that if an Association endorses or promotes any professional liability, medical or life
insurance program for its members that there is no insurance for claims arising because of the endorsement?
A: YES! However, recognizing that many Associations endorse insurance programs, including HMOs, NAR has
reached an agreement with the insurance carrier that the exclusion can be waived and coverage provided upon
compliance with the following criteria. It is not necessary to send this material to NAR to obtain a waiver prior
to endorsing a program. In the event a claim is filed involving the endorsement, the insurance company will ask
for verification that the program met the criteria established below at the time of the allegation in the claim before
extending coverage.
1.
The sponsored program must be fully insured as opposed to being self-funded in whole or in part by the
endorsing Association.
2.
The Insurer must: (a) be rated in the Best's Guide at "A" or better; and (b) provide the endorsing
Association with a written indemnification agreement, agreeing to indemnify and hold the sponsoring
Association harmless from and against any and all loss, cost or expense, including but not limited to liability
and reasonable attorney fees incurred as a result of claims based upon or resulting from Association
endorsements of such sponsored program. If the plan is a managed care organization, it must carry a
positive evaluation from Dun & Bradstreet.
3.
The promotional materials must state that: (a) members who participate in the sponsored program do so
voluntarily; (b) the Insurer has committed to provide the coverage for at least one (1) year; and (c) the
Association has no control over coverage or premium.
4.
The terms and conditions of the Association endorsements must be set forth in a written agreement to which
the Insurer is bound as a party which has a term of five (5) years or less, and a ninety (90) day or less
cancellation provision.
If these criteria are satisfied, coverage for the program will be provided, subject to the terms and conditions and the
insurance policy and the circumstances surrounding the claim.
17. Q: Does the Master Policy provide coverage for “Computer Attacks”?
A: YES! Coverage for a “Computer Attack”* to a third party resulting directly from the rendering of services as an
Association is covered. For example, A member downloads / receives material from a local Association. The
material interacts with the member’s computer system creating vulnerability in the security of the member’s
computer system that didn’t exist previously. This vulnerability is exploited by a hacker who damages the
member’s system and steals valuable information
* A “Computer Attack” means unauthorized access, unauthorized use, transmission of a malicious code or denial of
service attack which alters, copies, misappropriates, corrupts, destroys, disrupts, deletes, damages or prevents,
restricts or hinders access to a computer system; results in the disclosure of confidential information stored on an
Insured’s computer system; or results in identity theft. Whether any of the foregoing is intentional or unintentional,
malicious or accidental, fraudulent or innocent, specifically targeted at an Insured or generally distributed, and
regardless of whether the perpetrator is motivated for profit.
Questions & Answers, 2005 Insurance Policy Year, Page 7 of 11
18. Q: Will our Association’s Property and General Liability policy provide coverage for “Computer Attacks”?
A: Typically claims of this nature are limited or not covered under a traditional Property and General Liability
policy. Please check with your local agent on how your policy would respond.
19. Q: What are some of the exclusions?
A: A careful reading of the exclusions is necessary to understand what is not covered. There are exclusions for
malicious acts, bodily injury and property damage, claims under the Employee Retirement Income Security Act of
1974 (ERISA), claims arising out of the operation of a legal hotline program, Insured v. Insured, patent infringement
and misappropriation of trade secrets, first party “Computer Attacks”.
20. Q: What are the deductibles and limits of liability?
A: Following are the deductibles and limits of liability:
Deductible
for Both Insuring
Clauses IA and IB
Limit of Liability
Insuring Clause IA
Insuring Clause IB*
$1,000,000/claim
Multi-Management
Entities
$3,000
Commercial Overlay
Associations
$3,000
Local Associations
$3,000
Regional MLSs
$3,000
State Associations
$6,000
NAR, Institutes, Societies
and Councils
$20,000
Combined aggregate
deductible for
any one claim
$100,000
$1,000,000/claim (defense costs
only)
$500,000/claim
(sub-limit applies for
antitrust claims only)
$20,000,000 annual aggregate for all claims
*
1.
Lock Box
*
2.
Antitrust
*
3.
Discrimination/Fair Housing
*
4.
Sexual Harassment
*
5.
Employment Practices
*
6.
Trademark and Copyright Infringement of MLS System
*
7.
NAR Dispute Resolution
System or Counselors of Real Estate Dispute Resolution System
*
8.
Breach of Contract
Questions & Answers, 2005 Insurance Policy Year, Page 8 of 11
INCREASED LIMITS UNDER INSURING CLAUSES IA AND IB ARE EXPLAINED IN QUESTIONS 24 and 25.
THE INCREASED LIMITS UNDER INSURING CLAUSE IA AND IB ARE SUBJECT TO THE $20,000,000
ANNUAL AGGREGATE, AS ARE THE FLEX-PLAN OPTIONS UNDER INSURING CLAUSE IB AND THE
EMPLOYMENT PRACTICES LIABILITY OPTION. IT IS POSSIBLE THAT THE ANNUAL AGGREGATE OF
$20,000,000 FOR ALL CLAIMS COULD BE ERODED OR EVEN USED UP DURING A POLICY YEAR, IN
WHICH CASE THERE WOULD BE NO INSURANCE AVAILABLE FOR OTHER ASSOCIATIONS DURING
THE REMAINDER OF THAT POLICY YEAR IF THE INCREASED LIMIT IS SUBJECT TO THE
AGGREGATE. THE NETWORK SECURITY ENDORSEMENT IS IN ADDITION TO AND NOT PART OF THE
ANNUAL AGGREGATE OF $20,000,000.
21. Q: What were changes made within the past few years which should be noted?
A: The National Association, in order to ensure the program’s continuance, has instituted several changes to the policy.
These include:
1.
The definition of Wrongful Act has been expanded to include “Computer Attacks” to third parties resulting
from the rendering of services as an Association.
2.
As in the past, the Insured will still maintain ultimate control over choice of counsel. If an Insured chooses
to work with its own counsel who is not part of AIG’s approved list of attorneys “panel attorneys”,
however, AIG will negotiate rates with that law firm if their rates are higher than AIG’s approved rates for
panel attorneys in that area. For most cases, if rates are in excess of 40% above panel attorney rates in the
area, the Insured may be requested to contribute toward the difference. For those cases handled in the
Complex Claims Unit, which would include antitrust claims, if rates are in excess of 65% above panel
attorney rates in the area, the Insured may be requested to contribute toward the difference.
3.
Exclusion for Patent Infringement and Misappropriation of Trade Secrets. Previously, patent infringement
and misappropriation of trade secrets was not specifically excluded from the policy. Due to a corporate
decision made by AIG, an exclusion for patent infringement and misappropriation of trade secrets was added
in 2004.
4.
Previously, Insuring Clause IA provided coverage for claims resulting from Wrongful Acts, Personal Injury
or Publisher’s Liability. The definition of publisher’s liability was expanded to include trademark
infringement.
5.
Previously, Insuring Clause IB provided coverage for copyright infringement of an MLS. The coverage
includes both trademark and copyright infringement coverage for MLSs.
6.
Exclusion of Insured v. Insured cross-claims from the policy.
7.
Expansion of coverage to paid Mediators/Arbitrators for providing services for professional standards on
behalf of the covered National, state and local Associations. This does not include DRS Programs for
members of the public. Previously, coverage was only provided to voluntary Mediators/Arbitrators.
8.
Clarification that antitrust defense coverage for a claim commencing with a Civil Investigative Demand
("CID") is included. It is understood that CID shall include not only a Civil Investigative Demand
denominated as such, but also any official investigation undertaken by a governmental agency through
requests for documents or information received in writing on the agency's letterhead. Ordinarily, coverage
becomes available on the filing of a complaint against an Association. However, since the defense posture
of the Association may be compromised by an inappropriate response to a CID, the insurance company has
agreed to initiate antitrust defense protection and exercise its prerogative to select counsel commencing with
the service of a CID, or its equivalent. Also, specific language has been added to the policy confirming
coverage for civil investigative demands and agency investigations (EEOC claims, fair housing agencies,
etc.).
Questions & Answers, 2005 Insurance Policy Year, Page 9 of 11
9.
Clarification that coverage is provided to State Association staff members who respond to questions and/or
act as "on-site" consultants for local Associations on a variety of Association related issues usual to a real
estate trade association; most frequently, professional standards policies and procedures.
10.
Clarification that actions brought against the Association which seek preliminary injunctions, temporary
restraining orders, or declaratory judgments are covered.
11.
Clarification that claims by members of an Association against its Directors for negligent oversight of the
activities of a current or former Executive Officer are covered.
12.
Clarification that the National Association may participate in the selection of legal counsel and must agree
to settlement of claims, such agreement not to be unreasonably withheld. Please note that any attorney
appointed by the insurance company to represent an Association who is not already on the insurance
company's "approved panel" list must carry his or her own professional liability insurance coverage and
provide verification of such coverage in order to be appointed.
13.
Clarification that coverage is provided for both residential and commercial/industrial MLSs. The MLS has
to be a committee or a subsidiary of an Association and cannot be a separate corporation wholly independent
of an Association.
14.
Endorsement of the National Association's Homesellers/Homebuyers Dispute Resolution System is
considered a covered activity under the policy. Coverage is provided under Insuring Clause IA when an
Association endorses the NAR DRS program and refers cases to a third party mediation/arbitration provider.
If the Association functions as the mediation/arbitration service provider, defense costs coverage only is
provided under Insuring Clause IB. Please note that individual paid mediators working under the DRS
program are never covered by the NAR policy unless the Association purchases coverage for them under the
flex-plan program. If the Association does not purchase coverage for the mediators, the mediators should
carry their own professional liability insurance for mediation/arbitration activities. The flex-plan coverage
extends only to a mediator’s activities under the DRS program.
15.
Clarification that coverage is available to an Association if it is sued by a member as a result of the
Association's filing of a complaint against that member with the state's real estate commission.
16.
Clarification that defense costs coverage is available under Insuring Clause IB for claims arising under the
Americans with Disabilities Act.
17.
Clarification that coverage is available for Associations and their MLSs that place data on the
REALTOR.com home page via agreement with RealSelect. Likewise, Associations are covered under the
insurance program for placing MLS data on their individual Association home pages, provided the
Association has sole control over the data posted there. If the Association allows members to post their own
listings on the Internet via the Association's home page, the insurance company requires submission of the
agreement between the participants adding web page information and the Association. If appropriate
disclaimers and safeguards exist to protect the Association, coverage will be granted. Please note that if,
under the terms of any contract involving Internet information, the Association assumes the indemnification
or defense of another party involved in posting data, the insurance company will provide coverage to the
Associations but not to any party under an indemnification or defense provision in a contract.
18.
Expansion of coverage to include claims made throughout the world. Previously, coverage for claims was
limited to those brought in the United States.
19.
Coverage is provided to those associations that endorse the REALTOR VIP® Alliance Program. Current
offerings include automotive/travel, insurance, financial, office management, real estate publications,
safety/family protection, sales/marketing, and technology.
Questions & Answers, 2005 Insurance Policy Year, Page 10 of 11
22. Q: Who should the Association contact if questions arise as to whether or not specific types of risks or activities
are covered under the policy?
A: In many instances, agreements and understandings have been reached as to the meaning and scope of certain
provisions of the policy. Questions or problems regarding coverage should be directed to Gayle Andrews at Aon
Risk Services (312-381-7049) or via email to Gayle_Andrews@ars.aon.com) or Tim Gallagher at Aon Risk
Services (312-381-7048) or via e-mail to Tim_Gallagher@asc.aon.com). If they are not available, please
contact Mary Stark-Hood at NAR (312-329-8374) or via e-mail to mstarkhood@realtors.org).
23. Q: Who should be notified of a claim?
A: As soon as you become aware of a problem which may escalate into a lawsuit or are sued, immediately contact
American International Group and send a copy of any correspondence to NAR and AON RISK SERVICES. Note:
Failure by either you or your law firm to notify AIG immediately may jeopardize your coverage and result in
the denial of costs. The insurance policy states that "the Association, Directors, Officers and staff shall not
assume any obligations, incur any costs, charges, or expenses or enter into any settlement without the
Company's written consent". An Insured under this program should not incur any costs or settle any claims
without obtaining written consent from the carrier.
AMERICAN INTERNATIONAL GROUP
ATTENTION: Bill Legotte
175 Water Street, 8th Floor
New York, NY 10038
Tel:
212/458-1648
Fax: 866/802-4799
NATIONAL ASSOCIATION OF REALTORS®
ATTENTION: Laurene K. Janik, General Counsel
430 North Michigan Avenue
Chicago, Illinois 60611-4087
Tel:
312/329-8371
Fax: 312/329-8256
AON RISK SERVICES
ATTENTION: Tim Gallagher
Two Prudential Building
180 North Stetson
28th Floor
Chicago, Illinois 60601
Tel:
312/381-7048
Fax: 312/381-7003
AON RISK SERVICES
ATTENTION: Sue Suankum
Aon Center
200 E. Randolph St.
11th Floor
Chicago, IL 60601
Tel: 312/381-4642
Fax: 312/381-0175
EXCESS & ADDITIONAL COVERAGES
24. Q: If an Association feels it needs more than the specified limit per claim, is it possible to increase its
limits of coverage?
A: YES! Each Association has an opportunity to increase its per claim insurance limit under Insuring Clauses IA and
IB (see the enclosed applications).
25. Q: If an Association purchases higher limits under Insuring Clause IA and/or IB, is that coverage within the
overall limit of liability ($20,000,000)?
A: Excess purchased under Insuring Clauses IA, IB and for the flex plan options under Insuring Clause IB are subject to
the $20,000,000 aggregate.
Questions & Answers, 2005 Insurance Policy Year, Page 11 of 11
26. Q: Are additional coverages available under Insuring Clause IB (defense costs only)?
A: YES! The “flex plan” includes these lines of coverage. Specifically, Associations may elect to secure defense costs
coverage for the following activities:
1.
2.
3.
4.
5.
6.
Product Sales
Operation of Real Estate School
Endorsed Products / Affinity Programs
Leased Employees
Legal Hotlines
Mediators under the NAR DRS Program or the Counselors of Real Estate DRS Program. (only for
mediations performed under DRS program)
Please see the enclosed green application if you are interested in these additional coverage options.
27. Q: Is there additional coverage available for liability involving employment practices claims?
A: YES! Associations have the option to purchase liability coverage* for costs relating to settlements or judgments for
employment practices claims against the Association, Directors, Officers or staff arising from:





hiring
firing
compensation
employee privileges
other terms of employment
In order to qualify, the Association must adopt and follow the Employer/Employee Guidelines promulgated by NAR.
Associations can choose the following Limits of Liability: $250,000, $500,000 or $1,000,000 (all options are subject to the
$20,000,000 aggregate).
*Please note that the Defense portion of this coverage is already provided under Insuring Clause IB of the policy. This is an
enhancement to the coverage currently provided.
Please see the enclosed purple application if you are interested in Liability Coverage for Employment Practices Claims.
28. Q: Is there additional coverage available to cover Associations from “Computer Attacks”?
A: YES! Insured’s can now purchase expanded Network Security Liability to provide protection in the event of a
“Computer Attack” to their own computer systems. (see Question 17 for definition of “Computer Attack”).
29. Q: What about coverage for REALTOR® Foundations?
A: Coverage for REALTOR® Foundations will be provided to interested Associations via endorsement under the
master policy for an additional premium. The limit of liability will be $1,000,000 per claim/$1,000,000 annual
aggregate, with a $2,500 deductible. The premium for foundations with revenues under $500,000 will be $400 per
foundation. Foundations with revenues over $500,000 will be rated individually. For more information on
coverage for foundations and the application for coverage, contact Gayle Andrews at Aon Risk Services (312381-7049) or via email to Gayle_Andrews@ars.aon.com) or Tim Gallagher at Aon Risk Services (312-3817048) or via e-mail to Tim_Gallagher@asc.aon.com). If they are not available, please contact Mary StarkHood at NAR (312-329-8374) or via e-mail to mstarkhood@realtors.org).