Errors & Omissions (E&O) Insurance Disputes in Dallas, Texas

Typically, the penalty is four years for breach of contract and two years for Insurance Code violations, starting from the date of denial or harm.

Yes. Texas allows statutory and common law bad faith claims against insurers who fail to act reasonably or promptly.

Yes. Under Tex. Civ. Prac. & Rem. Code § 38.001, prevailing parties in contract claims can recover attorney’s fees. Statutory claims may also allow fee-shifting.

We examine whether the exclusion was fairly applied and whether it was used pretextually to avoid paying a covered claim.

Yes. The duty to defend is broader than the duty to indemnify. The insurer must provide a defense if even one allegation in a lawsuit is potentially covered.

Yes. Texas insurers can rescind an E&O policy if the applicant intentionally withholds material facts or misrepresents prior claims or known risks. If your insurer believes you omitted relevant information, they may argue that the policy was obtained through material misrepresentation, potentially voiding coverage from inception.

Not by default. Most E&O policies exclude independent contractors unless they are explicitly listed or scheduled as additional insureds. If your subcontractors or consultants are client-facing, you may need to extend coverage or require them to carry their own E&O insurance.

Yes. While both protect against liability for professional decisions, E&O covers individual professionals (like engineers, consultants, or agents), while D&O insurance protects corporate directors and officers against claims of mismanagement, breach of fiduciary duty, or governance failures. These are distinct policies; having one doesn’t substitute for the other.

Possibly. Texas follows the “eight corners rule,” which compares the allegations in the lawsuit (four corners) with the insurance policy (four corners). The insurer must defend the entire lawsuit if any allegation is potentially covered, even if other claims fall outside coverage.

Doing so may jeopardize your coverage. Most E&O policies in Texas include a “consent to settle” clause, which means you cannot settle a claim without the insurer’s approval. Unauthorized settlements may result in indemnity loss, even if the underlying act was otherwise covered.

Generally not. E&O insurance typically excludes administrative proceedings (e.g., from the Texas Department of Insurance, Texas Medical Board, or State Bar). However, some policies offer regulatory defense endorsements for an added premium. Consider reviewing these options with your broker or attorney if your profession is highly regulated.

It depends on your policy. Some E&O policies include mandatory arbitration or mediation clauses, which may limit your ability to file a lawsuit immediately. Texas law generally upholds valid arbitration agreements, so reviewing your contract’s dispute resolution provisions is essential before taking legal action.