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Dual Agency Disclosure Cost Calculator
Dual agency raises E&O premium and claim risk — quantify the hidden cost per transaction.
Cost per dual-agency txn
$1,250
Annual premium load
$900
Expected annual claim cost
$21,600
How the math works
Premium load = base × %. Expected claim = dual txns × freq × avg. Per-txn cost = total / dual txns.
18 dual × 3% × $40k = $21,600 expected claim + $900 premium load / 18 = $1,250 per dual-agency transaction.
How to Use
- Enter annual transactions.
- Enter dual-agency share %.
- Enter E&O premium load %.
- Enter dual-agency claim frequency %.
- Enter average claim cost.
- Read per-transaction cost.
Frequently Asked Questions
What is dual agency?
Same brokerage (or same licensee) representing both buyer and seller. Requires explicit written consent from both parties. Banned in 8 states (CO, KS, FL, MD, OK, TX, VT, WY) as true dual agency; those states allow designated agency instead. Rest of US: legal with disclosure. Controversial because fiduciary duties to two adverse parties are structurally conflicted.
E&O premium impact?
Brokerages with >20% dual agency: premium load 10-25% above single-agency peers. Carriers (Rice, CRES, Pearl, Lloyd's) flag dual agency as high-risk. Some carriers exclude dual agency claims entirely. Moving from 0 to 25% dual agency: $2-5k additional premium per producing agent per year. Most expensive when combined with new construction or investor clients.
Claim frequency?
Single-agency transaction claim rate: 0.5-1.5% of closings. Dual-agency: 2.5-5% — roughly 3x higher. Most common claim: buyer alleges seller-favored negotiation or undisclosed defect. Claims often settle $15-75k. Catastrophic claims (non-disclosure of material defects, fraud): $100-500k. Even when broker wins, defense cost $25-100k.
Risk mitigation?
(1) Written dual agency disclosure with both signatures. (2) Separate transaction coordinators for buyer and seller sides. (3) Designated agency where legal (two different licensees at same broker). (4) Additional E&O rider with dual-agency coverage. (5) Document every conversation + pricing rationale. (6) Refuse dual agency on complex transactions (new construction, distressed, estate).
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