Executive Summary Blog

Executive Summary Blog

Legal developments affecting professional liability insurers

Category Archives: Professional Services

Subscribe to Professional Services RSS Feed

Professional Services Exclusion Bars Coverage in Connection with Pipeline Explosion

Posted in Exclusion lead-in language (Arising out of), Professional Services
A California appellate court has held that a pipeline owner’s insurer is not entitled to reimbursement of defense costs and settlement payments from the insurer for the staffing agency that supplied personnel to the pipeline because the professional services exclusion in the staffing agency’s policy unambiguously barred coverage.  Energy Ins. Mut. Ltd. v. ACE American… Continue Reading

Eleventh Circuit Affirms Dismissal Where Professional Services Exclusion Unambiguously Created Joint, Not Several, Obligations

Posted in Professional Services
The United States Court of Appeals for the Eleventh Circuit has affirmed the dismissal of a breach of contract and bad faith case against two insurers based on the policies’ professional services exclusion, finding that the exclusion clearly created joint, not several, obligations.  Stettin v. National Union Fire Ins. Co. of Pittsburgh, Pa., 2017 WL… Continue Reading

Allegations Concerning Wage Fixing in Violation of the Sherman Act Do Not Fall Within Professional Liability Coverage for “Counseling” Services

Posted in Dishonesty Exclusion, Personal Profit/Advantage exclusion, Professional Services
Applying Colorado law, the United States District Court for the District of Colorado has held that allegations of collusion to fix wages in violation of the Sherman Antitrust Act do not fall within the scope of professional liability coverage for “counseling” services because “counseling” does not include an alleged agreement to fix wages.  Colony Ins.… Continue Reading

Attorney’s Prior Knowledge Bars Coverage for Client’s Malpractice Claim

Posted in Prior Knowledge/Warranty Exclusion, Professional Services
The United States District Court for the Northern District of Ohio, applying Ohio law, has granted summary judgment in favor of an insurer, holding that an insured attorney could reasonably have expected a claim where he received a letter addressed to multiple parties indicating that the attorney’s former client was represented by new counsel, who… Continue Reading

No Coverage for Accountant’s Solicitation of Investment in Entity He Partially Owned

Posted in Professional Services
In a win for Wiley Rein’s client, the United States Court of Appeals for the Ninth Circuit, applying Arizona law, has held no indemnity coverage was available under an accountants E&O policy because the insured was not providing “professional services” when soliciting an investment in an entity in which the accountant held a personal stake.… Continue Reading

Explicit Allegation of Acts Arising from Professional Services Required to Trigger E&O Policy

Posted in Professional Services
Applying Illinois law, the United States Court of Appeals for the Seventh Circuit has held that a lawsuit that mentioned that the insured provided professional services to the claimant, but did not directly assert that any of the wrongdoing in the complaint arose from those services, was not a covered claim under a real estate… Continue Reading

No Coverage Under E&O Policy for Real Estate Transaction Involving Payment of Undisclosed Fee

Posted in Professional Services
The Supreme Court of Utah has affirmed summary judgment in favor of an insurer, holding that language regarding the scope of coverage under a real estate brokerage company’s insurance policy encompassed only services performed for compensation through a traditional real estate commission.  Compton v. Houston Cas. Co., 2017 WL 1101816 (Utah Mar. 23, 2017).… Continue Reading

Insurer Had Duty to Defend Where at Least One Allegation “Possibly” Constituted a Wrongful Act

Posted in Professional Services
The United States District Court for the District of Connecticut, applying Connecticut law, has granted summary judgment in favor of an insured, holding that an underlying complaint alleged at least one act that could “possibly” fall within the policy’s definition of “wrongful acts,” triggering a duty to defend.  Fernandez v. Zurich Am. Ins. Co., 2017… Continue Reading

Professional Services Exclusion Bars Coverage for False Claims Act Suit Against Online Education Servicer

Posted in Professional Services
The United States District Court for the Northern District of California, applying California law, has held that a professional services exclusion bars coverage under a directors and officers liability policy for an online education program servicer against an action under the False Claims Act, holding that the False Claims Act allegations at issue arose out… Continue Reading

Sixth Circuit Enforces 24-Month Contractual Limitations Period In Bond; Employee’s Knowledge Bars Coverage for Company Under E&O Policy

Posted in Professional Services, Wrongful Act
The United States Court of Appeals for the Sixth Circuit, applying Michigan law, has held that an insured securities broker-dealer’s failure to bring legal proceedings within the 24-month period specified by its financial institution fidelity bond precluded coverage for losses resulting from an employee’s embezzlement scheme.  Hantz Fin. Servs., Inc. v. Am. Int’l Specialty Lines… Continue Reading

In Absence of Alleged Malpractice, No Professional Liability Coverage Available

Posted in Professional Services
In a win for an insurer represented by Wiley Rein, the United States Court of Appeals for the Fifth Circuit, applying Louisiana law, has held that a lawyers professional liability policy afforded no coverage for a suit alleging no act or omission by the insured in providing legal services.  Edwards v. Continental Cas. Co., 2016… Continue Reading

Professional Services Exclusion Precludes Duty to Indemnify but Not Duty to Advance Defense Costs

Posted in Professional Services
Applying New York law, the United States District Court for the Southern District of New York has held that a D&O insurer was not obligated to indemnify the insured or the insured’s E&O carrier because the D&O policy’s professional services exclusion applied. Beazley Ins. Co., Inc. v. ACE American Ins. Co., No. 15-cv-5119 (S.D.N.Y. Jul.… Continue Reading

Business Enterprise Exclusion Bars Coverage for Trustee Sued in His Capacity as a Director or Officer of Businesses Affiliated with Trusts

Posted in Professional Services
The Supreme Court of Wisconsin has held that a professional liability policy issued to an insured for his conduct as a trustee of two trusts afforded no coverage for a series of claims arising out of the trustee’s alleged conduct as a director or officer of businesses owned by the trusts. Marks v. Houston Cas.… Continue Reading

Appeals Court Vacates Ruling that Breach of Contract Exclusion Barred Coverage, Remands for Consideration of Choice of Law

Posted in Breach of Contract, Professional Services
A New Jersey intermediate court of appeals has vacated and remanded a case in which the trial court held that an insurer had no duty to defend based on a breach of contract exclusion, because the appellate court could not determine whether the exclusion applied without a choice of law analysis. Pharmacy & Healthcare Commc’ns,… Continue Reading

Competitor’s Claims That Broker Engaged in Unfair Business Practices Involve Professional Services and Are Not Precluded by the “Unfair Competition of Any Type” Exclusion

Posted in Professional Services
Applying Massachusetts law, the United States Court of Appeals for the First Circuit has held that unfair business practices claims brought against an insured insurance broker by a competitor involved professional services within the scope of its professional liability policy and that an exclusion for “unfair competition of any type” did not apply because the… Continue Reading

Contract and Willful Acts Exclusions Do Not Preclude Duty to Defend Tortious Interference and Copyright Infringement Claims

Posted in “Claim”, Breach of Contract, Defense Costs, Professional Services
The United States District Court for the Northern District of California, applying California law, has held that neither a breach of contract exclusion nor the implied willful acts exclusion provided for by California Insurance Code § 533 precluded an insurer’s duty to defend a lawsuit brought against its insured by one of its competitors for… Continue Reading

No Coverage Under D&O Policy For Misrepresentations Regarding Mortgage-Backed Securities Because Not “Securities Of” the Insured

Posted in Professional Services
The United States Court of Appeals for the Ninth Circuit, in an unpublished opinion applying California law, has held that there is no coverage under a D&O liability policy for claims alleging misrepresentations in offering documents for mortgage-backed securities because the mortgage-backed securities did not constitute “securities of an Organization.” Impac Mortgage Holdings Inc., v.… Continue Reading

No Coverage for Claims Arising from Failure to Appeal Adverse Decision

Posted in Bad faith/duty to settle, Prior Knowledge/Warranty Exclusion, Professional Services, Related Claims and associated exclusions
Applying Massachusetts law, a Massachusetts federal court has held that no coverage was available under two claims-made policies because the insured knew before policy inception that a client would bring a claim when the insured failed to perfect an appeal of an adverse zoning decision. Gandor v. Torus Nat’l Ins. Co., 2015 WL 6043621 (D.… Continue Reading

Advancement When Bank Customer Had Insufficient Funds Not a “Transaction in the Nature of a Loan”

Posted in Professional Services
The United States Court of Appeals for the Eleventh Circuit, applying Georgia law, has held that an advancement made by a bank similar to that made in connection with overdraft protection was not a “loan” within the meaning of a definition of “Lending Services” in a bankers’ professional liability policy. Greater Community Bancshares, Inc. v.… Continue Reading

Professional Services Exclusions Bar Coverage for Failure to Give Prescribed Drugs to Prisoner

Posted in Professional Services
Applying Texas law, the United States Court of Appeals for the Fifth Circuit has held that “medical services” and “professional services” exclusions in general liability and umbrella policies issued to a private prison operator barred coverage for a civil rights claim of an inmate who died while in custody due to the failure of the… Continue Reading

Lawyer Rendered “Professional Services” in Failure to Advise Investment Transaction Counterparty Regarding Title Insurance

Posted in Professional Services
A federal district court has held that an insurer breached a lawyers professional liability policy when it denied coverage in connection with a real estate investment transaction between a claimant and the insured lawyer, holding that the claimant believed the lawyer was representing him and that the lawyer rendered “professional services” when he failed to advise… Continue Reading

Professional Services Exclusion in D&O Policy Bars Coverage for Claim Arising from Provision of Payroll Services

Posted in Professional Services
Applying California law, the United States Court of Appeals for the Ninth Circuit has held that a professional services exclusion bars coverage for a suit against the directors and officers of a payroll services company because the suit arose from their failure to provide payroll services. Begun v. Scottsdale Ins. Co., 2015 WL 4910137 (9th Cir.… Continue Reading

Dishonesty Exclusion Bars Coverage for Attorney’s Charging Exorbitant Fee

Posted in Dishonesty Exclusion, Professional Services
The U.S. Bankruptcy Court for the Middle District of Florida, applying Florida law, has held that a dishonesty exclusion precludes coverage for a claim under a professional liability policy issued to a trusts and estates attorney who made fraudulent representations and abused his fiduciary position to obtain an exorbitant fee from an estate. Fla. Lawyers… Continue Reading