The United States Court of Appeals for the First Circuit, applying Massachusetts law, has affirmed the district court’s holding that a professional services exclusion in a real estate advisory fund’s D&O policy did not excuse the duty to defend a lawsuit brought by an investor in the fund because the allegations at issue were ambiguous… Continue Reading
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“Professional Services” Exclusion Bars Coverage for Law Enforcement Investigations
Posted in Professional ServicesA Nebraska state court has held that the “professional services” exclusion in the insured municipality’s CGL policy barred coverage for the wrongful conviction and civil rights actions brought against the municipality because its deputy sheriffs and psychologist performed “professional services” when they investigated the underlying crime. Gage County, Neb. v. Employers Mut. Cas. Co., No.… Continue Reading
Negligent Supervision of Funds Exclusion Bars Coverage for Trust Investment Losses
Posted in Loss, Professional ServicesThe United States District Court for the Eastern District of Virginia, applying Virginia law, has held that a professional liability policy’s exclusion for “negligent supervision” of funds applied to bar coverage for damages resulting from an insured attorney’s reckless investment of trust assets. ALPS Prop. & Cas. Ins. Co. v. Farthing, 2018 WL 4927366 (E.D.… Continue Reading
Alleged Fraudulent Submission of Medicaid Claims Does Not Constitute Rendering or Failure to Render Medical Professional Services
Posted in Professional ServicesApplying North Carolina law, the United States District Court for the Middle District of North Carolina has held that an insurer had no duty to defend or indemnify an insured for a qui tam action alleging false Medicaid reimbursement submissions because the suit failed to allege a claim arising out of the rendering of or… Continue Reading
Alleged 42 U.S.C. § 1983 Violations Not Professional Services Caused by “Negligence”
Posted in Allocation, Bad faith/duty to settle, Other Insurance, Professional Services, SubrogationThe United States District Court for the Northern District of Alabama has held that alleged constitutional due process violations under 42 U.S.C. § 1983 do not constitute professional services “caused by the negligence” of an insured. Madison County v. Evanston Ins. Co., 2018 WL 4680213 (N.D. Ala. Sept. 28, 2018).… Continue Reading
No Personal Injury Coverage for Payment Card Breach Because Damages Resulted from Hacker’s Criminal Conduct, Not Insured’s Data Security Practices
Posted in Cyber Policies and Issues, Professional ServicesA Florida federal district court has ruled that a claim asserting that an insured’s negligent data security practices led to a payment card breach did not trigger personal injury coverage under a CGL policy. See St. Paul Fire & Marine Ins. Co. v. Rosen Millennium, Inc., No. 6:17-cv-540-Orl-41GJK (M.D. Fla. Sept. 28, 2018). The court… Continue Reading
First Circuit Holds Physician’s Accessing of Ex-Wife’s Medical Records Allegedly to Harass Does Not Constitute “Professional Services”
Posted in Professional ServicesApplying Maine law, the United States Court of Appeals for the First Circuit has held that a professional liability insurer had no duty to defend a physician for claims arising out of his alleged improper accessing of his ex-wife’s medical records on the basis that such action did not constitute the rendering of professional services. … Continue Reading
Professional Services Exclusion Precludes Coverage for False Claims Act Lawsuit
Posted in Professional ServicesApplying California law, the United States Court of Appeals for the Ninth Circuit has held that a professional services exclusion in a D&O policy barred coverage for an underlying lawsuit alleging violations of the federal False Claims Act. Hotchalk, Inc. v. Scottsdale Ins. Co., 2018 WL 2473474 (9th Cir. June 4, 2018).… Continue Reading
Claim Arising from Sale of Dental Practice Does Not Involve Professional Services
Posted in Professional ServicesAn Illinois federal district court has held that a claim alleging that a dentist overstated the value of his dental practice to increase the practice’s sale price is not a claim for “professional services” under the dentist’s professional liability policy. Medical Protective Co. v. Fabricius, 2018 WL 2561009 (N.D. Ill. June 4, 2018).… Continue Reading
Faulty Workmanship Exclusion in Professional Liability Policy Bars Coverage for Faulty Design and Construction
Posted in Professional ServicesThe United States District Court for the District of Colorado, applying Colorado law, has held that an arbitration award for faulty design and construction was potentially recoverable as “damages” under a professional liability policy, but coverage was ultimately precluded by an unambiguous and broad “Faulty Workmanship” exclusion. Rockhill Ins. Co. v. CFI-Global Fisheries Mgmt., 2018… Continue Reading
Insurer Has No Duty to Defend Law Firm Against Allegations of Overbilling
Posted in Professional ServicesThe United States Court of Appeals for the Tenth Circuit, applying Colorado law, has affirmed that an insurer has no duty to defend a law firm against allegations of overbilling. Evanston Ins. Co. v. Law Office of Michael P. Medved, P.C., 2018 WL 2306871 (10th Cir. May 22, 2018). In so doing, the court recognized… Continue Reading
Tax Advice Was Not “Professional Services” Under Life Insurance Agents E&O Policy
Posted in Professional ServicesA California intermediate court of appeals, applying California law, has held that a life insurance agents E&O policy did not cover a suit by a financial advisor’s clients regarding advice provided to the clients to limit their tax liability. Lindsey Fin., Inc. v. Am. Auto. Ins. Co., 2018 WL 2111979 (Cal. Ct. App. May 8,… Continue Reading
Alleged Sexual Abuse by Teacher Not Covered as “Educational Employment Activities”
Posted in Professional ServicesApplying Virginia law, the United States District Court for the Western District of Virginia has held that an educators professional liability insurance policy did not afford coverage for a lawsuit against an insured school teacher accused of sexually abusing a student. Horace Mann Ins. Co. v. Barney, 2018 WL 1733989 (W.D. Va. Apr. 10, 2018). … Continue Reading
Text Messages Sent in Violation of TCPA Held to Implicate Professional Services Coverage
Posted in Loss, Professional ServicesA New York federal district court, applying New York law, has held that the sending of unsolicited text message advertisements in violation of the Telephone Consumer Protection Act (TCPA) triggered professional services coverage under a Miscellaneous Professional Liability (MPL) policy. Illinois Union Ins. Co. v. US Bus Charter & Limo, Inc., 2018 WL 1193464 (E.D.N.Y.… Continue Reading
Court Holds Insurance Exclusion Bars Coverage for Lawsuit Arising Out Of Lapse in Client’s Insurance Policy
Posted in Professional Services, Wrongful ActThe United States District Court for the District of New Jersey has held that an exclusion in a professional liability policy applicable to claims arising out of the failure to effect or maintain any insurance precludes coverage for defense costs incurred in an action against an insured on the basis that the action arose out… Continue Reading
Allegations of Fraudulent Scheme by Lawyer to Induce Payment of Insurance Benefits Constitutes “Professional Legal Services”
Posted in Dishonesty Exclusion, Prior Knowledge/Warranty Exclusion, Professional ServicesThe United States District Court for the District of New Jersey has held that allegations that a lawyer and his law firm engaged in a fraudulent insurance scheme to induce payment of personal injury protection benefits while representing clients constituted “Professional Legal Services” under the firm’s professional liability policy, triggering the duty to defend. Arzadi… Continue Reading
Breach of Fiduciary Duty Claim Against Lawyer Acting as Both Escrow Agent and Attorney for Counterparty Triggers Duty to Defend Notwithstanding Business Enterprise Exclusion
Posted in Professional ServicesThe Illinois Intermediate Appellate Court, applying Iowa law, has affirmed that a professional liability insurer must provide a defense for an attorney who allegedly mishandled funds that he was holding in escrow related to the plaintiff’s transaction with another company for which the attorney was vice president and legal counsel. Willey v. Minn. Lawyers Mutual… Continue Reading
Professional Services Exclusion Bars Coverage in Connection with Pipeline Explosion
Posted in Exclusion lead-in language (Arising out of), Professional ServicesA 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 ServicesThe 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 ServicesApplying 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 ServicesThe 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 ServicesIn 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 ServicesApplying 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 ServicesThe 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