Professional liability question

[devilscream]

Hi all

I've got the following fragment in my insurance:
"We agree to pay on your behalf all sums which you become legally obliged to pay (including liability for claimants' costs and expenses) as a result of any claim first made against you during the period of the policy arising out of your professional activities (...)".

Let's say I am providing my services to my Client.
My Client is providing his services (I am my Client's sub-contractor) to another Company.
What happens if that Company makes a claim against my Client? Does my insurance cover such a case, where my Client's insurance turns out not "big enough" (i.e. the liability limit of his own insurance is exceeded)?

I just want to understand what does "claim first made against you" means.

Best regards,
Daniel

 

[adjusterjack]

Based on only that sentence you quoted the answer is no, your insurance would not cover your client's own professional liability, only his.

However, if a customer of his sues him the customer is likely to sue you, too, and then your policy would cover you but only for your own liability, or provide you with a defense.

As for your second quote I'm guessing you have a "claims made" policy and not an "occurrence" policy.

This like will explain the difference:

https://www.thehartford.com/business-insurance/claims-made-vs-occurrence

I suggest you sit down with your agent for a more thorough explanation of your policy.