What’s Missing in Your Coverage? The Overlooked Role of Miscellaneous Professional Liability

Over the last several years, insurance agents and wholesalers have become hyper-focused on insuring the unknown, especially in the Cyber arena. They’ve worked to cover losses such as unauthorized access to an insured’s communication systems which could result in a ransomware event, or an electronic scam leading someone to send money to the wrong person. As Cyber incidents evolved and became more publicized, and as criminals became more creative, companies and insureds realized that no coverage existed for these emergent Cyber losses. Insurance companies, insurance agents and wholesalers began responding to the issues but by becoming so dedicated to Cyber exposures, some more traditional exposures were classified incorrectly or even overlooked. One of those classes is Miscellaneous Professional Liability.

Do Miscellaneous Professional Liability (“MPL”) policies have a place in the Cyber pot? In most Cyber forms, no, it doesn’t have one. And yet, a number of insureds that have an MPL exposure incorrectly believe if they have a Cyber policy, they have coverage for their Non-Cyber services.

Take, for example, a destination management company. What is their actual service? They act as event planners, travel agents and/or online/offline advertisers. In addition, they could provide specified websites for guests to RSVP, provide travel to and from airports, hotel reservations, rentals for event areas, and any number of other services that are not typically contemplated in a Cyber/Tech policy. Liability arising from such services are typically covered by a stand-alone Miscellaneous Professional Liability policy; however, such a policy may likely not cover their Cyber/Tech exposures.

Many Technology/Cyber policies will have a definition of Technology Services that reads:

“consulting on, design of, development of, manufacturing of, analysis of, selling and value-added reselling of, integration of, interface of, modification of, and programming of systems including communication systems, networks, software, application services, software as a service (SaaS), cloud computing, web services, wireless applications, firmware, shareware, hardware, electronic and digital devices and components performed by you for others; installation of, training in the use of, support of, servicing of, maintenance of, repair of systems including communication systems, software, application services, web services, wireless applications, firmware, shareware, hardware, electronic and digital devices and components performed by you for others; marketing, selling, licensing and distribution of your systems including communication systems, networks, software, application services, web services, wireless applications, firmware, shareware, hardware, electronic and digital devices and components services by you; storing, warehousing, mining and processing of data by you for others; managing, operating, administering  and hosting:  technology, cloud computing, systems, or computing facilities of others by you; internet or networked activities you perform for others; activities performed on your website(s); activities creating, maintaining and disseminating hosted web content of a named insured.”

While definitions like the one above include a robust list of covered services, there aren’t any services listed in this definition for event planning, acting as a travel agent, providing travel to and from airports, making hotel reservations, or rentals for event venues and/or equipment. In the case of the definition above and others like it, these event planning services would not be included under the Technology/Cyber policy’s definition of technology services.

Additionally, in this example of the destination management company, several of the services not covered could result in a bodily injury/property damage claim. If the policy has an exclusion for property damage and bodily injury, the bodily injury exclusion typically includes an exclusion for mental anguish, mental injury, pain and suffering or shock.

Thankfully, in most cases the insured will have General Liability (GL) coverage that may cover the property damage or the bodily injury. But what if the incident is catastrophic? As an example, what if the venue catches fire or a van full of people is in an accident? Will there be enough limit with just the GL?

When Cyber or a combined Tech/Cyber policy does not contemplate the insured’s services and when a GL policy will not suffice, blended coverage featuring Miscellaneous Professional Liability and Cyber coverage may be the answer. This type of product can not only minimize gaps in coverage, it also can be a risk transfer tool for the agent or wholesaler to use to help their clients more comprehensively address all exposures.

The companies that offer this type of blended coverage manage the coverage grants in different ways, so it’s important to review the policies and compare insuring agreements and all definitions when selecting a market for blended coverage. If the insured’s business services are not listed or defined somewhere in the policy, then there is probably no coverage and the insured can be left without the necessary coverage for the services that they provide. To keep insureds from missing out on important coverage, a blended Miscellaneous Professional Liability policy that includes the in-demand Tech/Cyber coverage provisions is the answer.

Meet the Author

Kristine Stone, Executive Underwriter, HudsonPro

Hudson Insurance Group

Kristine Stone is an executive underwriter for HudsonPro Professional Liability products which include tech, media, cyber, manufacturing, insurance agents and brokers and miscellaneous professional liability accounts. Prior to joining Hudson Insurance Group, Kristine was a senior underwriter for Euclid Managers, LLC, an underwriting manager and claim administrator. In 2015, Euclid Managers, LLC was acquired by Hudson Insurance Group. Kristine just celebrated her 20th anniversary working with Hudson Insurance Group. Prior to underwriting for Euclid, Kristine underwrote a book of business for Media/Professional Insurance. At the end of her career with Medi/Professional Kristine was working specifically on Cyber/Tech exposures. Kristine holds a Chartered Property Casualty Underwriter (CPCU) and continues to pursue related forms of education to keep abreast of the ever changing Cyber/Technology landscape.