An article I recently read regarding the various Professional Liability Exclusions that will be found on most CGL policies written for contractors caught my attention. The article can be found here.
The article's conclusion follows and is a good educational reference:
Because of the potential for an overly expansive application of the professional services exclusion, the endorsement CG 22 43 is no longer intended by ISO to be used with contractors engaged in construction operations. In 1996, ISO introduced two additional professional services exclusions—CG 22 79 and CG 22 80.
The first exclusion—CG 22 79—"Exclusion—Contractors—Professional Liability" is almost verbatim to CG 22 43 but with one significant difference. Professional services does not include (and therefore the exclusion does not apply) to "services within construction means, methods, techniques, sequences and procedures employed by you in connection with your operations in your capacity as a construction contractor." Thus, allegations of faulty construction should not be excluded, to the extent the operations involve construction "means and methods."
The second exclusion—CG 22 80—"Limited Exclusion—Contractors—Professional Liability" is also almost verbatim to CG 22 43, but the exception to this exclusion is very significant—the professional services exclusion does not apply to the named insured's construction work, including construction work done on behalf of the named insured.
CG 22 80 is intended for design-build contractors; the CGL policy excludes coverage only if the named insured is providing professional services in connection with construction not performed by or on behalf of the named insured. Design work done as part of the named insured's construction work, including construction work done on behalf of the named insured, is not excluded by this endorsement.