Bodily Injury Exclusions In E&O Policies

Professional services companies, such as a real estate brokerage, a securities broker-dealer or a technology services company, look to their professional liability insurance, often referred to as an errors and omissions (E&O) policy, for coverage when they are sued for mistakes in serving their customers. While E&O policies cover business litigation risks arising from claims for economic losses – such as a bank’s liability to a customer for allowing a wrongdoer access to its accounts – damages resulting from professional errors can expand beyond the purely economic. This can result in a disconnect between the insured’s expectations of coverage and what the underwriter thinks are the policy’s limitations.