Connecticut still adheres to the more traditional approach with respect to limitation of liability. This is quite a departure from what I understand to be New York's position on the subject.
In addition to recovery under the law of negligence there are also theories of recovery under contract law. In which case it is questionable as to whether e&o insurance would be applicable. If the property owner is in a position to claim third party beneficiary status under the contract for abstracting services, he may have the right to assert a claim for contract breach against the abstractor for consequential damages resulting from the abstractor's failure to perform his contractual obligations in a reasonable and workman- like manner. (This is an implied term of all contracts in Connecticut). This is the law of contract's corrollary to a negligence claim sometimes used when there is a statute of limitations problem.
There is also the possibility of the property owner asserting a claim for negligent misrepresentation if he could foreseeably have relied on the abstractor's report to his detriment.
Other states will probably differ to some degree or another, but that is where we are here in old Connecticut. After having gone to law school in Chicago, it was hard to get used to the somewhat archaeic old English terms, practices and law in this area. However, having worked with it for 22 years, I have come to respect it and understand it.
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