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Texas AG Posts An Opinion About E & O

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Here is the URL to the Texas AG's Opinion regarding the recent vague legislative ruling concerning E&O for HI's in Texas. Reading the opinion has given me a headache and (my view) is loaded with enough double-speak.

I've also included a comment I received from TREC Legal this morning (11-27-07).

TX AG's Opinion:

http://www.oag.state.tx.us/opinions/op5 ... a-0581.htm

TREC Legal Comment:

Mr. Kienitz:

The Attorney General opinion, GA-0581, confirms that insurance policies cannot be obtained to cover intentional acts, such as fraud. It also clarifies that the coverage must be on a per occurrence basis. No legal opinion was expressed as to whether the law requires a "general liability" policy, a "professional liability"/"errors & omissions" policy, or both because the nature of the coverage is a matter of the policy language, rather than what a particular policy is called. Because the statutory requirement is simply that the policy cover the public against violations of Subchapter G (excluding those violations that would be intentional in nature), we believe that the rule that has been proposed and will be up for final adoption comports with this view. That rule says that the requirement is for "professional liability or any other insurance that provides coverage for violations of Subchapter G of Chapter 1102." Essentially, TREC requires proof of insurance that offers coverage for negligence in the performance of your professional duties - the type of coverage that we have come to think of as "professional liability" (or "errors and omissions"), although the policy does not need to bear that label.

Devon V. Bijansky

Staff Attorney

Enforcement Division

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