Environmental Consultants and Professionals: Professional Liability Coverage Issues

The Legal Team has received recent requests for claims examples involving Environmental Consultants. From a coverage perspective, one area to be cognizant of is how a policy defines “professional services” in the environmental consulting space. One of the newly added claims examples, URS Corp. v. TriState Environmental Management Services, Inc., involved a complex environmental remediation project with subsurface drilling.

The drilling hit underground cables belonging to Amtrak, causing significant damages. The project manager sought coverage as an additional insured under the drilling subcontractor’s Pollution Protection Package policy, which included both general liability, Contractor’s Pollution, and Professional Liability insuring agreements. The policy’s Professional Liability coverage defined “professional services” as environmental consulting services, while the base form GL coverage had a broad professional liability exclusion. The carrier attempted to deny coverage to the project manager by invoking the professional liability exclusion. However, the policy had a separate definition for “contracting services” that included environmental drilling and probing activities, and the Court therefore found the professional liability exclusion ambiguous in granting Additional Insured status to the project manager.