“Professional Services” Exclusion Bars Coverage for Law Enforcement Investigations
A 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. CI 17-1822, (Neb. Dist. Ct., Lancaster County, Nov. 1, 2018).
In 2009 and 2011, six individuals, who had been convicted and later exonerated for the rape and murder of a Nebraska woman, brought actions against the municipality for wrongful conviction and civil rights violations. The insured municipality’s CGL insurer refused to defend these actions because it argued that the municipality’s sheriffs had performed professional services that were excluded from coverage under the CGL policy’s professional services exclusion. The term “professional services” was undefined.
The court held that the meaning of “professional services,” when not defined by the policy, is “an act or service arising out of a vocation, calling, occupation, or employment involving specialized knowledge, labor, or skill” that is “predominantly mental or intellectual, rather than physical or manual.” Furthermore, the court determined that the municipality’s sheriffs and psychologist had engaged in “professional services” because their actions involved “decision-making based on [their] training and experience” as police officers, and that they used “law enforcement’s specialized decision-making process” to investigate the case. For this reason, the court determined that the “professional services” exclusion in the CGL policy barred coverage for the actions alleging the sheriffs’ and psychologist’s wrongful conduct.