Errors & Omissions (E&O) Insurance Disputes in New York, NY

Generally, six years from the date of breach under CPLR § 213, unless otherwise specified in the policy.

Yes, if you can show the insurer's breach caused foreseeable business losses.

Yes, but punitive damages are only awarded where the insurer acted with gross disregard for your rights or intentionally harmed you.

Yes. The duty to defend is broader than the duty to indemnify, and insurers must defend any claim with a reasonable possibility of coverage.

Under most claims-made policies, timely reporting is still required. Consult an attorney immediately to assess options for late notice defense.

Not always. Many E&O policies exclude pure breach of contract claims unless the breach arises from professional negligence or a wrongful act as defined in the policy. For example, failing to meet a deadline may be covered if it involves negligent service delivery, but not if it's a simple failure to perform under a commercial agreement. The key is whether the breach is tied to a professional duty.

Yes. E&O claims can involve shared liability among multiple insureds or non-insured third parties. Even if another professional contributed to the alleged harm, your insurer may still have a duty to defend you. Courts in New York look at whether any part of the claim falls within the coverage terms, not whether you were the sole cause.

While brokers can assist in notifying insurers and explaining policy terms, they are not legal representatives and typically cannot resolve disputes. If a denial occurs, a broker’s role is limited. However, in some cases where a broker fails to secure proper coverage, they themselves could face negligence liability, potentially triggering their own E&O exposure.

Possibly. Most E&O policies extend coverage to employees acting within the scope of their employment, but not to independent contractors unless specifically named. The claim may be excluded if the employee acted outside company policy or engaged in intentional misconduct.

Generally, no. Civil or criminal fines, penalties, and sanctions imposed by regulatory agencies (e.g., SEC, NYDFS, DOH) are almost always excluded. However, legal fees associated with defending against regulatory investigations may be covered under certain endorsements or specialized policies.

Yes. Even if no formal lawsuit has been filed, a subpoena or notice of deposition may signal a potential claim. Most policies allow for reporting “circumstances that may lead to a claim,” and early notice can preserve your right to coverage. Failing to report it could undermine future defense rights.

It depends. Some E&O policies give the insurer the right to appoint panel counsel, while others allow you to select your own attorney with the insurer’s consent. If there is a conflict of interest—for example, if coverage is reserved or partially denied—you may be entitled to independent counsel at the insurer’s expense under New York law.