Professional liability policies, also known as errors and omissions (E&O) policies, are designed to provide coverage for the acts, errors, or omissions of professionals in performing professional services. Conversely, commercial general liability (CGL) and homeowners’ policies typically exclude coverage for professional services. When and whether an insured is engaged in a professional service is thus a threshold issue in determining whether coverage exists and under which type of policy.
Complicated issues can arise in determining whether the insured was performing “professional services.” This is especially so if the insured allegedly engaged in illegal activity that was somehow related to the legitimate professional activity. For example, a frequent claim is that a medical professional sexually molested a patient during an examination. Whether the molestation is part of the insured’s professional services is determined by a case-by-case evaluation of the facts.