A Houston-based safety engineering firm was sued in a construction site wrongful death suit. It tendered the suit to its CGL insurer, the Travelers Indemnity Co., who denied a defense based on its policy’s Professional Liability exclusion. Eighteen months later, this insured filed suit against Travelers in Houston Federal Court for breach of contract and declaratory judgment that Travelers owed it a duty to defend the wrongful death suit. The insured argued that the allegations in the underlying Petition were vague and therefore, they circumvented the Traveler’s CGL policy’s Professional Liability exclusion. Travelers turned to Dallas-based IADC Member Bob Allen to defend the case.
The case highlights the interplay between an engineering firm’s CGL and Professional Liability coverages. Arguing that the burning limits feature of the Professional Liability coverage would eventually exhaust that policy, the insured contended that not only did the Traveler’s CGL policy impose a duty to defend; but that the CGL coverage was primary and so, Travelers must reimburse the amounts expended. Travelers argued that the Professional Liability and CGL coverages dovetail each other and do not overlap. Since this was a Professional Liability claim, the coverage for it was limited to the Professional Liability coverage.
Bob filed a Rule 12(b)(6) Motion to Dismiss. On January 17, 2020, Houston Federal Judge Keith Ellison heard oral arguments and took the matter under advisement. Four days later, he granted Travelers Motion to Dismiss in this memorandum opinion.