A federal court in Georgia held that a professional services exclusion in a directors and officers liability policy did not preclude coverage for claims involving improper fee charges associated with the business of the insured as that did not involve the insured’s “specialized knowledge.”Philadelphia Indem. Ins. Co. v. First Multiple Listing Servs., Inc., 2016 WL 1109171 (N.D. Ga. Mar. 22, 2016).

A class-action lawsuit was filed against the insured, a real estate listing service, relating to the insured’s practice of providing alleged improper kickback fees. The insured sought coverage under its directors and officers liability policy. The insurer denied coverage based on the policy’s professional services exclusion, among other reasons, and sought a declaration that the policy did not cover the class-action lawsuit. The policy’s professional services exclusion barred coverage for any loss “involving the Insured’s performance of or failure to perform professional services for others.” The insured argued that the class-action lawsuit involved its business, not its professional services, and that the term “professional services” is ambiguous.

The court granted the insured’s motion for summary judgment, holding that the professional services exclusion did not bar coverage. To constitute a “professional service” under Georgia law, “the task must arise out of the acts specific to the individual’s specialized knowledge or training.” The court concluded that the class-action lawsuit did not include allegations regarding the insured’s maintenance of its real estate listing database, and thus did not involve the insured’s “specialized knowledge.” The court held that the professional services exclusion did not apply to the claims involving improper fee charges. It also noted that if the plain meaning had not resulted in such a finding, it would have found the undefined term “professional service” to be ambiguous and construed coverage in favor of the insured.