Time To Review Your Policy

Fires.  Floods.  Tornadoes.

Have you ever carefully read the insurance policy you paid for to protect your business or your home?  Do you know the limits of coverage, the conditions of payment, or the exclusions that may apply?

National news coverage of the devastation in Oklahoma and Texas and local coverage of recent catastrophic fires and flooding reminds us that many times homeowners and business owners believe they have coverage when, in fact, their insurance company may have a different view.  Now is the time to re-read your policy with your insurance agent or your attorney to make sure you have the coverage you need.  In Indiana, the general rule is that an insured has a duty to learn the contents of his or her insurance policy himself, even though it may become necessary to have some third person read the contents to him.  Penwell v. Western and Southern Life Insurance Co. (1985), Ind. App., 474 N.E.2d 1042, 1044 (quoting Ohio Casualty Insurance Co. v. Rynearson (7th Cir.1974), 507 F.2d 573, 581).

Now is a very good time to review your policy.  For more information on this critically important subject, contact us.

The “Professional Services” Exclusion

You run a small business.  Someone allegedly gets hurt while on your premises and you receive a letter from her attorney notifying you of the claim.  You advise your insurance company, fully expecting them to come to your rescue and provide you with counsel to defend your business against the injury claim.

But then, to your amazement, your insurance company sues your business.  Why?  They are asking the court to determine that there is no coverage for your business because of a provision in your CGL policy known as the “professional services” exclusion.  What is this exclusion all about?

“Claims based on negligent performance of commercial or professional services are ordinarily insured under ‘errors and omissions’ or malpractice policies.  For this reason, CGL policies typically exclude claims arising out of professional or other business services.”  Tri-Etch, Inc. v. Cincinnati Ins. Co. 909 N.E.2d 997, 1002 (Ind. 2009), citing Erie Ins. Group v. Alliance Envtl., Inc., 921 F.Supp. 537, 541 (S.D.Ind. 1996).

There may be exceptions to the “professional services” exclusion, and your business may, in fact, have coverage for the claim — even if the insurance company argues there is not.  Every situation is different.  For an evaluation of your situation, contact us.