California Property & Casualty Broker-AgentCasualty InsuranceHard
A California architect is purchasing a Professional Liability policy. The architect is concerned about claims alleging negligence in their design work. Which of the following is most likely an exclusion found in a standard Professional Liability policy for architects?
- AClaims related to providing inaccurate cost estimates.
- BClaims resulting from errors in blueprints for structural integrity.
- CClaims for bodily injury to a third party on the construction site.
- DClaims arising from failure to meet project deadlines.
Show answer & explanationAnswer & explanation
Correct answer: C. Claims for bodily injury to a third party on the construction site.
Professional Liability policies (E&O) cover economic damages resulting from professional negligence or errors. Bodily injury to a third party on a construction site is typically covered by a Commercial General Liability (CGL) policy, not Professional Liability, as it stems from general premises and operations risk rather than professional advice or design error.
Why the other options are wrong
- A. Inaccurate cost estimates are a professional error that can lead to economic loss, typically covered.
- B. Errors in blueprints for structural integrity are a core professional negligence risk for an architect, thus covered.
- D. Failure to meet deadlines can be a professional error leading to economic loss, typically covered.
Professional Liability Exclusions
Professional Liability policies (Errors & Omissions) typically exclude coverage for claims that fall under other types of insurance, such as bodily injury or property damage not directly arising from professional advice or services.
- Generally excludes bodily injury and property damage (covered by CGL).
- May exclude dishonest, fraudulent, or criminal acts.
- Often excludes claims for guarantees or warranties.
Memory trick: E&O: Excludes Ordinary Ops, Covers Only Opinions!