{"id":894760,"date":"2018-08-23T14:49:17","date_gmt":"2018-08-23T20:49:17","guid":{"rendered":"https:\/\/www.myconstructionexpert.com\/blog\/?p=894760"},"modified":"2018-08-24T10:04:08","modified_gmt":"2018-08-24T16:04:08","slug":"cgl-policies-professional-liabilities-exclusion","status":"publish","type":"post","link":"https:\/\/www.myconstructionexpert.com\/blog\/cgl-policies-professional-liabilities-exclusion\/","title":{"rendered":"CGL Policies and the Professional Liabilities Exclusion"},"content":{"rendered":"<p>David Adelstein | <a href=\"http:\/\/www.floridaconstructionlegalupdates.com\/cgl-policies-and-the-professional-liabilities-exclusion\/\" target=\"_blank\" rel=\"noopener\">Florida Construction Legal Updates<\/a> | August 11, 2018<\/p>\n<p>Commercial general liability (CGL) policies for contractors traditionally contain a\u00a0<strong>professional liabilities exclusion.\u00a0<\/strong>\u00a0This exclusion is generally added through a<strong>specific endorsement<\/strong>\u00a0to eliminate coverage for professional services. Read the\u00a0endorsement \u00a0 The point of the exclusion, in a nutshell, is simply to eliminate a CGL policy for a contractor serving as a professional liability policy.<\/p>\n<p>Contractors need to appreciate a professional liabilities exclusion added through endorsement because oftentimes there are delegated design components they are responsible for. Perhaps the contractor value engineered a system and is responsible for engineering and signing and sealing the engineered documents (through its subcontractor) associated with that system.\u00a0 Perhaps there is a performance specification that requires the contractor to engineer a system.\u00a0 Perhaps there is a design-build component.\u00a0 Regardless of the circumstance, this professional liabilities exclusion can certainly come into play, particularly if a defect is raised with the design or professional services associated with the engineered system.<\/p>\n<p>In a non-construction case dealing with a professional liabilities exclusion, the Second District Court of Appeal in\u00a0<i>Alicea Enterprises, Inc. v. Nationwise Ins. Co. of America, Inc<\/i>., 43 Fla.L.Weekly D1713b (Fla. 2d DCA 2018) held:<\/p>\n<p><strong>Whether a professional service has, or has not, been rendered is a fact-intensive analysis.\u00a0 Thus, when deciding whether an act arises out of the rendering of or failure to render a professional service, the court must focus on the act itself and not the character of the individual performing the act.\u00a0 The act from which the claim arises must be related to a professional service that requires the use of professional judgment or skill.\u00a0<i><\/i><\/strong><\/p>\n<p><i>Id<\/i>. (internal citations omitted).<\/p>\n<p>In this case, the insurer issued a CGL policy to a pharmacy.\u00a0\u00a0 The pharmacy was sued in a negligence action.\u00a0 The pharmacy\u2019s CGL insurer filed an action for declaratory relief claiming it had\u00a0neither a duty to defend nor indemnify\u00a0its insured (the pharmacy) since the underlying claims arose out of professional services and the CGL policy contained a\u00a0professional liabilities exclusion.<\/p>\n<p>The Second District maintained, as to the insurer\u2019s duty to defend its insured, that the insurer had a\u00a0<strong>duty to defend<\/strong>\u00a0the pharmacy (insured) in the negligence action because the allegations in the underlying complaint could be deemed unrelated to professional services.<\/p>\n<p>The Second District maintained, as to the insurer\u2019s\u00a0<strong>duty to indemnify\u00a0<\/strong>its insured, that this duty is more fact-intensive and without sufficient discovery, there was a genuine issue of material fact as to whether the evidence brought the pharmacy\u2019s conduct within the meaning of the professional liabilities exclusion in the CGL policy.<\/p>\n<p>Here, while the pharmacy will get the benefit of the insurer\u2019s duty to defend since that is triggered by the underlying complaint, the duty to indemnify is different and triggered by the facts. \u00a0It is likely that the facts in this case trigger the application of the professional liabilities exclusion,\u00a0meaning the CGL insurer does NOT have a duty to indemnify the insured for the damages proven against it. \u00a0Not the situation an insured wants to be in!<\/p>\n","protected":false},"excerpt":{"rendered":"<p>David Adelstein | Florida Construction Legal Updates | August 11, 2018 Commercial general liability (CGL) policies for contractors traditionally contain a\u00a0professional liabilities exclusion.\u00a0\u00a0This exclusion is generally added through aspecific endorsement\u00a0to eliminate coverage for professional services. Read the\u00a0endorsement \u00a0 The point of the exclusion, in a nutshell, is simply to eliminate a CGL policy for a&hellip; <a class=\"more-link\" href=\"https:\/\/www.myconstructionexpert.com\/blog\/cgl-policies-professional-liabilities-exclusion\/\">Continue reading <span class=\"screen-reader-text\">CGL Policies and the Professional Liabilities Exclusion<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false},"version":2}},"categories":[30],"tags":[9895,4739,57,478,10558],"class_list":["post-894760","post","type-post","status-publish","format-standard","hentry","category-general-liability-policy","tag-advise-consult","tag-commercial-general-liability-policy","tag-duty-to-defend-2","tag-duty-to-indemnify","tag-professional-liabilities-exclusion","entry"],"jetpack_publicize_connections":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v25.0 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>CGL Policies and the Professional Liabilities Exclusion - Advise &amp; 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