Two speakers break down a $10 million near-loss caused by an intermediary representing both sides without disclosing the conflict and withholding critical documents. They explain how errors-and-omissions insurance covers misrepresentation and breach of duty, and flag the intermediary's lack of equity participation as a warning sign they wanted to dodge deal risk.
Are you in the deal room? 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 kind of area because theoretically he He's like, hey, you have all the documents, but he never once mentioned anything.
Yeah. And he was representing both parties. Remember, it goes back to the beginning when we talked about who's he representing, us, them, or
both.
Yeah. And 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—
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 can cover the legal fees, settlements, and judgments, and it includes the claims even if you did nothing wrong.
