Thin margins, fast deals, and I'm now hearing from a broker that dual agency claims are the ones that get agents sued and that carriers treat them differently. Is that a real thing or is he selling me something? What does E&O even cost on a small shop.
Answer
E&O is errors and omissions insurance, the professional liability coverage that pays defense costs and settlements when a client claims an agent's mistake or failure to disclose cost them money. Real estate brokerages carry it, and in a few states some form of coverage is required to hold a license or is provided through the state program. Which applies to you depends on your state's license law, so confirm with your commission before you buy anything.
On cost, a small brokerage typically sees per-agent premiums in the low hundreds to around a thousand a year, with deductibles commonly in the 2,500 to 10,000 range per claim. Those are wide ranges because they move with claim history, transaction count, and what you handle. Get quotes rather than trusting the range.
The part about dual agency is grounded in something real. Failure-to-disclose and breach-of-duty claims are a common category, and dual agency creates two clients who can each later argue the agent favored the other. Some policies carry specific exclusions or conditions around dual agency, undisclosed compensation, or transactions where the agent has a personal interest. Read the exclusions page, not the brochure.
What matters as much as the policy is your file. The signed consent, dated before the offer, plus notes on what you disclosed to whom, is what a defense actually runs on. Agents lose these cases on missing paperwork more often than on bad judgment. And since the settlement made written compensation disclosure standard, an incomplete file now stands out more than it used to.