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The underwriters at Lloyd's of London supporting the PFAC sponsored Errors & Omissions ("E&O") insurance program have recently approved a Commercial General Liability ("CGL") insurance program for PFAC members. The program provides for either a stand alone CGL policy or an endorsement to an existing E&O policy. For professional fiduciaries the coverages provided under a CGL insurance policy dovetail with those afforded by E&O coverage. Both types of liability insurance are necessary, but they address different exposures.
E&O coverage applies to claims for damages arising out of errors or omissions in the provision of professional services. The policy applies expressly to financial loss and specifically excludes coverage for physical property damage and most bodily injury claims. The one exception built into the PFAC endorsed E&O policy through Lloyd's is bodily injury to a ward or conservatee which arises out of an act, error or omission in rendering professional services. CGL policies, on the other hand, are designed to cover losses arising out of a broad range of both bodily injury and property damage. Normally, a CGL policy also includes coverage for "advertising injury" and "personal injury". These later two coverages may, depending upon the circumstances, be covered under an E&O policy as well.
Because professional fiduciaries are interacting with the public on a regular basis, it is prudent to carry CGL coverage. Imagine you or one of your employees negligently leaving an obstacle or dangerous condition in someone's path who as a result trips, falls and is injured. Or perhaps you can envision, yourself or an employee of yours accidentally knocking over an expensive vase in your client's home. These types of claims would routinely fall within the scope of CGL coverage, but would be excluded under an E&O policy.
Typically, CGL coverage is combined with various property coverages in a business office package ("BOP") policy. However, if you work out of your own home, not having an appreciable amount of business property, a BOP may be overkill, both from a coverage and cost perspective. For the home office practitioner, standalone CGL coverage makes more sense in most cases.
For a home-based business, a separate CGL policy is generally necessary because the homeowners liability policy normally contains a business pursuits exclusion and would typically only apply to losses occurring on the insured premises, not elsewhere.
Dominion offers competitively priced standalone CGL or BOP policies to PFAC members throughout California. Also, as mentioned above, the PFAC endorsed E&O policy can be amended by policy endorsement to provide broadened bodily injury and property damage coverages as well. This policy endorsement is generally significantly less expensive than purchasing a separate policy. Dominion staff stand ready to review your particular circumstances to determine an appropriate solution from both a coverage and cost perspective given your particular circumstances.
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