E&O Limits

[Milkman1265]

Here's another technical question for E&O coverages.

Since professional liability is "pesonal" and can not be shield by a corporate veil.

If you have a 1MM e&o coverage and a settle arises and they grant 3MM in damages.

Do you bankrupt corporation or they go after your personal assets to recover the 3MM.

Do personal liability and umbrella cover you for a claim arising out of professional services?

 

[nbarnes]

Professional and Management Liability coverage forms are written to protect the personal assets of the Insured Person but may have Corporate Coverage as well. If the policy has entity coverage, which almost all Professional E&O policies have, then the coverage is shared between the individual and the corporation. Specifically, there is an allocation clause in the policy to address issues that stem from the coverage separation should there not be enough limits to cover the entity's liability and the individual insured person's liability.

As for bankrupting the corporation, this more than likely would be determined by state laws governing incorporation or memberships (LLCs or Partnerships). Definitely would need a legal opinion on this one.

Sorry for the long response!