RISKY BUSINESS: INSURANCE COVERAGE IN THE PROFESSIONAL LIABILITY CONTEXT

Zandra E. Foley
Cory S. Reed
Michella R. Gibbs
Thompson Coe Cousins Irons, LLP

Diana Brown
Sam Houston State University

ABSTRACT

On a daily basis, people are exposed to liability for merely doing their job. For certain
skilled professionals, the gravity of the risks associated with their work and their exposure to
liability is heightened due to the specialized nature of the services they provide. While some risks
are avoidable (bearing in mind, we’ve all seen Botched)—some risks are inherent aspects of the
profession and are almost inevitable. Without a doubt, lawyers will lose cases, insurance agents
will deny claims, therapists will have patients who commit suicide, and consultants will
incorrectly surmise the success of potential business ventures. Regardless of how preventable the
risks may be, the most common tool professionals use to protect against both the expected and the
unexpected liabilities that stem from their performance of professional services is insurance
coverage.
This study provides a basic overview of some key issues concerning insurance coverage
in the professional liability context. First, the authors discuss the basic components of insurance
policies. Next, they address the specific nature of what triggers (and fails to trigger) professional
liability coverage in the context of errors and omissions policies, as well as general liability
policies. The authors then, more specifically, examine some common exclusions that apply to
insurance policies in the professional liability context.
Keywords: Insurance, risk, professional liability, policy, performance