20.3 OTHER TYPES OF LIABILITY POLICIES
20.301 In General. The following are additional types of liability policies that are relevant in a construction setting and provide coverage that is excluded from, or beyond the scope of, the typical CGL policy.
20.302 Errors and Omissions Policies for Construction Professionals.
A. Scope of Coverage. Professional liability or "errors and omissions" insurance provides coverage to architects, engineers, and other professionals for claims arising from their errors or omissions in rendering professional services. This type of coverage may be on a claims-made basis or occurrence-based, and is generally understood to provide coverage for special risks inherent in the insured's specific profession. 133
A typical insuring agreement for a professional liability policy provides coverage for damages "arising only out of the negligent acts, errors, or omissions in the rendering of, or failure to render, such professional services as are regularly or customarily rendered in the professional operations of the Insured." 134
It is important to note that, unlike CGL policies, claims for breach of contract, including claims that an architect or engineer failed to live up to
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its contractual obligations, likely are covered under a professional liability policy. 135 This is based, in part, on the view that a "negligent" act or omission, as that term is used within the meaning of a professional liability policy, is not synonymous with a negligence cause of action and may encompass a breach of a contractual duty. 136 Also, errors and omissions coverage is purchased specifically to protect against the risk that professionals will fail to meet their contractual obligations, and limiting professional liability coverage to tort liability would seriously undermine this objective. 137 Under this view, courts focus on the nature of the allegedly wrongful conduct rather than the form of action pled to determine whether a claim is within the insuring agreement of a professional liability policy. 138
B. Exclusions. Exclusions commonly found in professional liability policies may include intentional, dishonest, fraudulent, or criminal acts; 139 the violation of statutes or ordinances; 140 risks or losses known to the insured as of the effective date of the policy; 141 and pollution (which may include claims arising out of federal or state statutes such as the Resource Conservation and Recovery Act (RCRA); the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA); or the Clean Air Act), 142 among others.
Most professional liability policies contain so-called "deemer" clauses which provide that multiple claims arising out of the same wrongful act or interrelated wrongful acts may be treated as (deemed) a single claim subject to a single claim limit. 143 "Deemer" clause may be considered to be
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exclusionary in nature. 144 As with other policy terms, careful attention to the precise policy language must be paid.
C. Policy Conditions. Like other types of insurance policies, professional liability policies include conditions with which the insured must comply; for example, cooperating with the insurer and providing notice of claims within a particular timeframe. 145 As with other types of policies, it is important for the insured to become familiar with and comply with the conditions of its professional liability policy.
20.303 Workers' Compensation Insurance. If an employee sustains an injury arising out of and in the course of employment...
