Countering Bodily Injury Exclusion Denial

Attorney Adam K. Gallagher discusses some applicable case law for the all-too-common situation in which an insurer denies coverage for a directors and officers claim (which would otherwise be covered) citing the bodily injury exclusion. Search EDP, Inc. v. American Home Assur. Co. From the New Jersey Appellate Division has been cited in other jurisdictions. In that case, an employee sued Search EDP for failing to perform a background check on a computer programmer, who assaulted the employee. Search EDP’s Errors and Omissions insurer American Home denied coverage citing the bodily injury exclusion. The Search EDP court cited an older New Jersey case, stating: “the errors and omissions policy here will fairly fulfill its stated objective only by reading the bodily injury exclusion as excepting bodily injury claims alleged to have resulted from an act of professional wrongdoing.”