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Return Of Professional Fees Exclusion

Return of Professional Fees Exclusion

Definition

An exclusion found in a number of professional liability policy forms precluding coverage for situations where, as part of the damages awarded to a claimant, an insured is required to return the fees charged for a negligently performed professional service. For example, if an architect draws faulty plans that cause a building to collapse, a court might also order the architect to return the fees charged for the faulty work in addition to monies for bodily injury (BI) and property damages (PD) resulting from the collapse, However, many professional liability policies contain a provision that precludes coverage for such fees based upon the rationale that professional fees constitute a business risk that should not be the subject of insurance coverage.

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