Insurance policies are full of defined terms that set the scope of coverage initially afforded and the categories of uncovered losses under specific endorsements or exclusions. As the drafter of the policy, the insurer controls what terms are defined and the types of claims it wishes to exclude.
Failing to define terms within an exclusion can come with disastrous consequences for an insurer given exclusions are construed against the insurer in almost every jurisdiction. Unfortunately for Continental Insurance Company, it had to learn this lesson the hard way.
Crane 1 Holdco, Inc. v. Continental Ins. Co., 2026 WL 81733 (N.D. Indiana Jan. 12, 2026)
Crane 1 stems from a construction site injury. Robert Coppage was seriously injured when he was crushed by a crane while working for Niagara LaSalle Corp. at one of its plants. In the years before Coppage was injured, Crane 1 Holdco, Inc. (Crane 1) was hired by Niagara LaSalle to perform visual inspections on cranes in use at the plant.
At the time of Coppage’s injury, Crane 1 was insured under a primary policy issued by Traveler’s Insurance that provided $1 Million in liability coverage. Additionally, Crane 1 was also insured under an excess policy with Continental that provided $10 Million in coverage in excess of the Traveler’s policy.
Important to this case, the Continental Policy contained the following exclusion:
Professional Services
any liability arising out of the actual or alleged rendering of, or failure to render any professional services by the Insured or any other person for whose acts the Insured is legally responsible.
Importantly, ‘professional services’ was not defined in the exclusion or in the general provisions of the Continental Policy.
Underlying Lawsuit
After his injuries, Coppage sued Crane 1 and others. Coppage initially claimed that Crane 1 was negligent in modifying, servicing, maintaining, inspecting and repairing the crane that failed. Crane 1 tendered the claim to Travelers and Continental. Travelers appears to have accepted coverage and made its $1 Million in coverage available to settle the Underlying Lawsuit.
Continental took a different approach. Continental decided instead to issue a series of reservation of rights letters to Crane 1 based on Continental’s belief that the Underlying Lawsuit implicated the Professional Services Exclusion. Continental did elect to participate in the defense of the Underlying Lawsuit and hired counsel to defend Crane 1.
During the course of the Underlying Lawsuit, Coppage’s claims against Crane 1 significantly narrowed. For example, it became clear that Crane 1 had not really made any repairs to the crane that failed. Instead, Coppage’s theory of liability focused on Crane 1’s visual inspection of the subject crane. The scope of these inspections was somewhat limited and became vitally important to the coverage analysis.
As trial approached, Crane 1 and Coppage agreed to mediate. Continental was informed of the mediation and informed Crane 1 that it would only offer nominal amounts in settlement due to its coverage position. Without any help from Continental, Crain 1 and Coppage settled the Underlying Lawsuit for an amount within the limit of the Continental Policy and with Crain 1 funding the majority of the settlement with corporate funds.
Coverage Action
After funding the settlement in the Underlying Lawsuit, Crane 1 filed an action against Continental seeking reimbursement for the amount it paid. The obvious dispute between Crane 1 and Continental centered on the applicability of the Professional Services Exclusion. Each party moved for summary judgment on this issue.
In making its determination, the Court noted that Continental had not defined ‘professional services’ in the exclusion or in the general policy definitions. Without a definition, the Court stated it was “a bit at sea” when trying to determine whether Crane 1’s inspections were professional services within the meaning of the exclusion.
Absent a definition, the Court decided to judge whether Crane 1’s inspections required the use of specialized training or skill or the interpretation of specific data. In reviewing the scope of the inspections, the Court analyzed the testimony of Crane 1 employees and the company’s representative. This testimony revealed that the inspections consisted of visual inspections conducted from the ground in which the inspectors were only looking for visual signs of excessive wear and tear, listening for abnormal sounds and noting abnormal smells. The inspectors were essentially following a one page check list and were not authorized to initiate or make any repairs. The inspectors were not OSHA certified and did not check the cranes for code compliance.
Using the policy construction maximum that exclusions should be interpreted narrowly, the Court determined that the exclusion was inapplicable to the inspection work done by Crane 1. In the Court’s view, there was insufficient evidence to find that the Crane 1 inspections were utilizing any specialized training or skill when performing the visual inspections of the crane at issue.
Even the Court acknowledged that Crane 1 was a close call. It is likely that Continental wanted to exclude Crane 1’s crane inspections from coverage. However, Continental chose not to specifically exclude the inspections or fully define what it meant by professional services. This decision ensured that Continental is footing the bill for the settlement of the Underlying Lawsuit and Crane 1 received the protection it hoped for under the policy.
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