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1325 North Van Buren5/17/2005
ces of 1325's claims need to be explored in more detail than has been provided in the briefs, and as such, the determination of the extent to which these exclusions preclude coverage invokes factual issues to be determined on remand.
C. The professional liability policy requires Westport to defend and indemnify T-3 against 1325's claims concerning T-3's failure to provide adequate professional services.
1325 contends that Westport's professional liability policy provides coverage for 1325's breach of contract claims that T-3 inadequately provided professional services. It insists that a professional liability policy that covers an insured's "negligent acts, errors and omissions" provides coverage for contract claims, and specifically, that: (1) malpractice claims may be asserted in both tort and contract; (2) Westport's interpretation is inconsistent with the broad grant of coverage afforded under its insuring clause, would render coverage provisions superfluous, is contrary to that of a reasonable person in the position of the insured, and is not in harmony with all of its policy provisions; (3) there is no limitation in Westport's policy barring actions for parties in contractual privity with its insured; and (4) there are no exclusions in the Westport policy that bar coverage here.
Westport asserts that professional liability policies are designed to insure against third-party claims arising out of damage caused by the negligent performance of the professional task, and that its policy insures only for liability imposed as a result of wrongful acts, which require negligent conduct. Westport contends that its policy should not be treated as a performance bond and does not provide coverage for contractual liability, asserting that "the policy requires a legal obligation to pay for loss or damage, because of a wrongful act committed by the insured[;]" that breach of contract is not a wrongful act, because "wrongful act" is defined as "actual or alleged negligent act, error or omission[,]" which it insists requires negligent conduct; that in the absence of tort or negligence-based claims, there is no wrongful act as required by the policy, and thus, Westport has no obligation to indemnify.
Westport also cites a number of foreign cases in support of the proposition that a policy premised on "negligent act , error or omissions" does not provide coverage for breach of contract, even if the conduct precipitating the breach was negligent. Moreover, Westport claims that, unlike in a scenario involving attorney malpractice, for example, " ere, there is no duty, breach of duty, accident or fortuity independent of the contractual relationship." Thus, Westport asserts that absent a common law duty independent of the contract between the parties, there is no right to bring a tort action. And, finally, Westport contends that even if coverage is triggered, exclusions in the policy eliminate coverage for 1325's claims.
We have already concluded that the economic loss doctrine does not apply here, and as such, the negligence claims were improperly dismissed. Nonetheless, the broad grant of coverage in the professional liability policy cannot be interpreted to limit coverage in the way Westport advocates. The Westport policy provides:
We shall pay on behalf of any insured all "loss" ... which any insured becomes legally obligated to pay as a result of "claims" first made against any insured during the "policy period" ... by reason of any "wrongful act"....
"Wrongful act" is defined as "any actual or alleged negligent act, error or omission in the performance of 'professional services' for others by an insured...." "Professional service
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