Pursuing "Professional" Coverage Under CGL Policies: Handling the Professional Services Exclusion

Typical professional liability and errors and omissions (E&O) liability policies require that the liability arise out of “professional services” on the part of the policyholder. Not surprisingly, some insurers have attempted to defeat insurance coverage claims by arguing that the activity alleged by the claimant does not constitute a professional service – a term left undefined by most insurance policies. Once a claim is filed, many policyholders quickly learn that the quality of their E&O insurance coverage largely depends on the quality of their insurer’s claims-handling practices. As insurance brokers and risk consultants have cautioned, prospective policyholders should use only those insurers that will “‘stay the course’ and honor their commitments when the coverage is needed.”