Transaction coordinator agreements: cap liability at the fee, or carry E and O and price for it
Two patterns show up consistently in transaction coordinator engagement letters. The first caps the coordinator's liability at the fee paid, disclaims responsibility for missed deadlines, and states the client remains responsible for reviewing all dates and documents, typically priced at $300 to $400. The second has the coordinator carrying errors and omissions coverage, sometimes specifically naming coordination services, with no cap at the fee, priced higher, generally $500 to $650, with the premium built into that number. The case for the capped structure: a coordinator has no authority over anyone in the deal, she cannot make a lender fund or a seller sign, so pricing in liability for outcomes she cannot control means every client effectively pays for a risk that mostly sits with the agent's own E and O coverage anyway. Capped agreements keep the fee low and the volume workable. The case for the insured structure: a blown contingency can cost real money, and the party who caused it should be reachable for some portion of it. A cap at the fee on a $15,000 loss is functionally the same as no recovery at all, and if a coordinator cannot stand behind the date calendar, the calendar is a courtesy rather than a product. What the indemnity language actually reaches in practice depends on state law and specific policy wording, which is a question for an attorney and an insurance broker licensed in the relevant state rather than a general answer. As a commercial choice rather than a legal one, both structures are defensible, and the right one usually depends on deal volume, the coordinator's actual authority in the transaction, and how much risk the parties want priced into the fee versus carried separately.
Which coordinator agreement would you rather sign?
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