Catherine Bell's team averts a $10 million loss when they catch an E&O insurance gap in a broker deal. E&O covers misrepresentation, negligence, and legal fees, but not fraud or intentional concealment. The broker's failure to disclose information and possible conflict of interest made the coverage critical.
Are you in the deal room? With going back to yesterday's Zoom call where I have to have a little bit of— I have to go eat a little bit of humble pie.
So who wants to see a humble pie party?
We're going to have a look. We're going to eat a little bit of humble pie. I owe it to my— I owe it to my partner, Katya, cohort Katya, to eat some humble pie in front of her so she understands how this is how business works. And Katya, did you see the information I sent you this morning about what's called P&O Insurance?
Yes, I actually read it right before the call. Nice.
Okay, so what do you understand what it is?
Just for everybody else here, I can actually also reference the exact GPT, but basically it's like the insurance, I guess, that protects you against the same example that happened yesterday. So if you're misrepresented or they don't fully reveal all the information necessary. So here, let me actually bring it up if you guys want me to.
Yes, because here's— I want everybody to understand this. And so, Dan, just bear with us for a moment. We discovered something yesterday in a deal that we were in negotiation with that literally saved us probably $10 million mistake. So, okay.
Yeah.
Errors and omissions insurance. And so it covers misrepresentation claims, negligence, mistakes, failure to disclose, breach of duty, which I think that—
Come on in. Keep going, Katya.
Oh, sorry. I think that when I look at it, it seems like we were in a breach of duty duty kind of area, because theoretically he's like, hey, you have all the documents, but he never once mentioned anything.
Yeah, and he was representing both parties.
So remember, it goes back to the beginning when we talked about who's he representing, us, them, or both? Yeah, they never clarified that, right?
Yeah, so that's against the client's best interest.
And I also, I was thinking about it yesterday, and could that have been the reason why they didn't want to have equity in the deal because they need to get—
100%. Do you want to have equity in a dirty deal?
Yeah.
No.
Oh, hell no. You want somebody else fix that.
So now it's kind of clicking because Option C and Option B were basically the same timelines, except Option C was, you know, way more money and all he had to do was kind of be in it with us a little bit. But now I know why he didn't choose that option. So with E&O, you You can cover the legal fees, settlements, and judgments, and it includes the claims even if you did nothing wrong.
Uh, keeps your brokerage in operation financially intact. So it covers attorney fees, settlement payout, court costs. Uh, does not cover fraud, criminal acts, property damage, known issues you deliberately hid. And so here's a general cost structure, and then here's an action plan. I don't know if Tommy wanted me to follow that for today or just leave it, but that's about it.
But good to know.
