Drawing A Line In The Sand: The Second Circuit Tries To Define Where D&O Coverage Ends And E&O Coverage Begins

Policyholders often obtain both errors and omissions (E&O) and directors and officers (D&O) liability insurance policies because they provide complementary coverage. E&O policies provide coverage for claims for wrongful acts arising from the provision of "professional services," and while D&O policies also provide coverage for claims for wrongful acts, they often exclude coverage for such claims arising from the provision of professional services. Despite this distinction, determining the scope of a "professional services" exclusion in a D&O Policy is not always an easy task. The Second Circuit's recent decision in Beazley Ins. Co., Inc. v. ACE Am. Ins. Co., No. 16-2812-cv (2d Cir. Jan. 22, 2018) illustrates the difficulties inherent in interpreting these types of provisions.