Illinois Insurance - Illinois Appellate Court Applies “Professional Services” Exclusion In General Liability Policy To Claim Of Negligent Hiring And Supervision Of A Professional
National Fire Insurance Company of Hartford v. Kilfoy, 874 N.E.2d 196 (Ill. App. 2007)
In a recent opinion, the Illinois Appellate Court gave the Professional Services exclusion in a General Liability policy an “expansive meaning” and applied the exclusion to claims relating to negligent hiring and supervision
of professionals.
In the underlying case, a patient injured during LASIK eye surgery tried to trigger coverage under the eye clinic’s General Liability insurance policy by alleging that the eye clinic was negligent in hiring the eye care professionals,
in administrative supervision of the eye care professionals and in operation of the eye care clinic. The General Liability policy contained a Professional Services exclusion that applied to claims for bodily injury relating to supervisory
services; medical, surgical or nursing services treatment, advice or instruction; any health or therapeutic service treatment, advice or instruction; or optometry or optical services. The General Liability insurer denied coverage
and filed a declaratory judgment action on the ground that the underlying complaint alleged “professional services.” The trial court granted summary judgment to the General Liability insurer and the policyholder appealed.
On appeal, the policyholder contended that the allegations of negligent hiring were not excluded under the definition of professional services. The insurer contended that it required specialized knowledge and skill in order to ensure
that prospective employees are qualified to render medical services and therefore the professional services exclusion was implicated.
The Illinois Appellate Court distinguished between hiring procedures that involve administrative reviews, pre-employment screening or verification of references and hiring procedures that involve evaluation of the applicant’s
professional training, skill, experience or knowledge. The former involve administrative precautions and do not constitute professional services. However, the latter involve the application of specialized knowledge and skill and
are a predominantly mental or intellectual endeavor. As such, the Illinois Appellate Court held that the claim of negligent hiring of a professional falls within the terms of the Professional Services exclusion.
For the same reason, the Illinois Appellate Court held that the other claims relating to the negligent operation and management of the eye clinic involved professional services and were excluded.