Includes copyrighted material of Insurance Services Office, Inc., with its permission.

ISO is introducing numerous new and revised optional endorsements available to the General Liability program, with a proposed effective date of December 1, 2019. Some of the optional endorsements will address emerging issues, others will provide customers with some long-awaited enhancements to the program, or others will simply provide additional options for underwriting risks. Many of the endorsements have the same or very similar changes. Each set of endorsements will be addressed together; for example, the Automatic Additional Insured Endorsements will be addressed together in one section, as will the other endorsements.

Topics Covered:

New Products/Completed Operations Aggregate Limit of Insurance Endorsements

Automatic Additional Insured Endorsements

This revision applies to the following additional insured forms:

CG 20 03 Additional Insured – Concessionaires Trading Under Your Name

CG 20 05 Additional Insured – Controlling Interest

CG 20 07 Additional Insured – Engineers, Architects Or Surveyors

CG 20 10 Additional Insured – Owners, Lessees or Contractors – Scheduled Person or Organization

CG 20 11 Additional Insured – Managers Or Lessors Of Premises

CG 20 12 Additional Insured – State Or Governmental Agency Or Subdivision Or Political Subdivision – Permits Or Authorizations

CG 20 13 Additional Insured – State Or Governmental Agency Or Subdivision Or Political Subdivision – Permits Or Authorizations Relating To Premises

CG 20 15 Additional Insured – Vendors

CG 20 18 Additional Insured – Mortgagee, Assignor Or Receiver

CG 20 23 Additional Insured – Executors, Administrators, Trustees Or Beneficiaries

CG 20 24 Additional Insured – Owners Or Other Interests From Whom Land Has Been Leased

CG 20 26 Additional Insured – Designated Person Or Organization

CG 20 27 Additional Insured – Co-Owner Of Insured Premises

CG 20 28 Additional Insured – Lessor Of Leased Equipment

CG 20 29 Additional Insured – Grantor Of Franchise

CG 20 30 Oil Or Gas Operations – Nonoperating, Working Interests

CG 20 31 Additional Insured – Engineers, Architects Or Surveyors

CG 20 32 Additional Insured – Engineers, Architects Or Surveyors not Engaged By The Named Insured

CG 20 33 Additional Insured – Owners, Lessees Or Contractors – Automatic Status When Required In Construction Agreement With You

CG 20 34 Additional Insured – Owners, Lessees Or Contractors – Automatic Status When Required In Lease Agreement With You

CG 20 35 Additional Insured – Grantor Of Licenses – Automatic Status When Required By Licensor

CG 20 36 Additional Insured – Grantor Of Licenses

CG 20 37 Additional Insured – Owners, Lessees Or Contractors – Completed Operations

CG 20 38 Additional Insured – Owners, Lessees Or Contractors – Automatic Status For Other Parties When Required In Written Construction Agreement

CG 29 35 Additional Insured – State Or Governmental Agency Or Subdivision Or Political Subdivision – Permits Or Authorizations

Analysis:

Many general liability endorsements are in existence to provide an additional insured with liability coverage addressing vicarious liability or contributory negligence. If the additional insured coverage is required by contract or agreement, the amount the insurer will pay on behalf of the insured is restricted to the lesser of the amount of insurance required by the contract or agreement, or the applicable limit of insurance shown in the Declarations. Some of these endorsements may have a specific limit of insurance. With this forms revision, you will see that many of these endorsements will no longer contain the phrase "shown in the Declarations". This is to account for the specific limit of insurance, regardless if it is shown in the Declarations or on an endorsement.

The revised endorsements will read as follows:

With respect to the insurance afforded to these additional insureds, the following is added to Section III – Limits Of Insurance:

If coverage provided to the additional insured is required by a contract or agreement, the most we will pay on behalf of the additional insured is the amount of insurance:

  1. Required by the contract or agreement; or
  2. Available under the applicable limits of insurance;

whichever is less.

This endorsement shall not increase the applicable limits of insurance.

Endorsements CG 20 11 and CG 20 24 are undergoing additional revisions. In ISO's 2004 multistate form revisions, "arising out of" language was added to a number of additional insured endorsements to provide coverage for the additional insured with respect to the injury or damage caused, in whole or in part, by the acts or omissions of either the named insured or those acting on behalf of the named insured. While not limited to such, these revisions primarily were for construction type exposures.

Endorsements CG 20 11 and CG 20 24 are undergoing additional revisions. In ISO's 2004 multistate form revisions, "arising out of" language was added to a number of additional insured endorsements to provide coverage for the additional insured with respect to the injury or damage caused, in whole or in part, by the acts or omissions of either the named insured or those acting on behalf of the named insured. While not limited to such, these revisions primarily were for construction type exposures.

The new revisions will address similar changes with additional, non-construction specific, additional insured endorsements, namely, CG 20 11 Additional Insured – Managers Or Lessors Of Premises, and CG 20 24 Additional Insured – Owners Or Other Interests From Whom Land Has Been Leased. The changes in these endorsements deletes the "arising out of" language, and adds specific language to provide an additional insured with coverage for their vicarious or contributory negligence only. The additional insured will have coverage for the bodily injury, property damage or personal and advertising injury caused, in whole or in part, by either the named insured or those acting on behalf of the named insured. This change is designed to prevent any alleged coverage for the additional insured's sole negligence.

The Schedule within endorsement CG 20 24 is being revised to include "land" in lieu of "premises" in the schedule heading to better reflect the design of this endorsement. The revised heading will read, in part: Designation Of Land (Part Leased To You).

In states where named insureds are permitted by contract to hold harmless an additional insured for that additional insured's sole negligence; and in states where courts have allowed coverage for the additional insured's sole negligence, these changes may be a reduction in coverage.

The current endorsement CG 20 15 Additional Insured – Vendors amends the Who Is An Insured provision by adding as an additional insured the person(s) or organization(s) designated in the endorsement Schedule, but only with respect to the named insured's products described in the Schedule which are distributed or sold in the regular course of the vendor's business. As stated above, the revised endorsement will no longer contain the phrase "shown in the Declarations" to account for the applicable limit of insurance, regardless if it is shown in the Declarations or on an endorsement.

Endorsement CG 20 33, retitled to Additional Insured – Owners, Lessees Or Contractors – Automatic Status When Required In A Written Construction Agreement With You and endorsement CG 20 38 will both receive additional changes.The retitling of CG 20 33 reinforces that the endorsement only applies to written contracts or agreements, not oral, express, implied or other.

When CG 20 38 was introduced in 2012, it was designed for situations when a named insured contracted with another (third) party, and that contract or agreement required for the third party to be named as an additional insured. The endorsement also extends additional insured status to other parties if the named insured is required to name those parties in the contract. These other parties are known as upstream parties, and will typically apply to building owners or project managers in connection with the contract or agreement. Therefore, CG 20 38 will provide additional insured status to all parties the named insured is required to name as an additional insured in the specific contract or agreement, even if the insured does not directly contract with such parties.

Endorsement CG 20 38 is revised with respect to the below excerpt by adding the wording, 'described in Paragraph 1. or 2. above'. This change will reinforce that the additional insured status also extends to third parties if they are required to be named in the contract or agreement.

A. Section II – Who Is An Insured is amended to include as an additional insured:

  1. Any person or organization for whom you are performing operations when you and such person or organization have agreed in writing in a contract or agreement that such person or organization be added as an additional insured on your policy; and
  2. Any other person or organization you are required to add as an additional insured under the contract or agreement described in Paragraph 1. above.

Such person(s) or organization(s) is an additional insured only with respect to liability for "bodily injury", "property damage" or "personal and advertising injury" caused, in whole or in part, by: a. Your acts or omissions; or b. The acts or omissions of those acting on your behalf; in the performance of your ongoing operations for the additional insured described in Paragraph 1. or 2. above.

In addition, a new broadening endorsement, CG 20 44 Additional Insured – Vendors – Automatic Status When Required In Agreement is introduced. This endorsement will provide additional insured status to those persons or organizations the named insured is obligated to name as additional insureds in a written contract or agreement, but only with respect to the distribution or sale of any of the named insured's products in the regular course of the vendor's business.

Insured Status For Newly Acquired or Formed Limited Liability Companies (LLCs)

The following new endorsements are introduced :

CG 24 54 Automatic Insured Status For Newly Acquired Or Formed Limited Liability Companies (for use with the Commercial Liability Coverage Part)

CG 34 35 Automatic Insured Status For Newly Acquired Or Formed Limited Liability Companies (for use with the Electronic Data Liability Coverage Part)

CG 34 36 Automatic Insured Status For Newly Acquired Or Formed Limited Liability Companies (for use with the Liquor Liability Coverage Part)

CG 34 37 Automatic Insured Status For Newly Acquired Or Formed Limited Liability Companies (for use with the Pollution Liability Coverage Part – Designated Sites)

CG 34 38 Automatic Insured Status For Newly Acquired Or Formed Limited Liability Companies (for use with the Products/Completed Operations Liability Coverage Part or for use with the Pollution Liability Limited Coverage Part – Designated Sites)

Analysis:

In the past, a newly acquired or formed limited liability company (LLC) could not be granted named insured status, even if the named insured maintained ownership or majority interest, thus leaving many of these LLCs without coverage. With this forms revision, a number of optional endorsements will amend the Who Is An Insured provisions to generally include Limited Liability Companies (LLCs) the named insured newly acquires or forms, and over which the named insured maintains ownership or majority interest, if there is no other similar insurance available to that limited liability company. These endorsements will provide affected insureds with a long-awaited broadening of coverage. The same limitations that currently apply to newly acquired or formed organizations will apply to these LLCs, including affording coverage for the earliest of either the 90th day after the LLC is newly acquired or formed, or the end of the policy period. Further, no coverage will apply to prior occurrences before the LLC was acquired or formed.

Automatic Additional Insured Endorsements – Non-Construction Risks

This filing adds the following new automatic additional insured options:

CG 20 33 Additional Insured – Owners, Lessees Or Contractors – Automatic Status When Required In Construction Agreement With You

CG 20 34 Additional Insured – Lessor Of Leased Equipment – Automatic Status When Required In Lease Agreement With You

CG 20 35 Additional Insured – Grantor Of Licenses – Automatic Status When Required By Licensor

CG 20 38 Additional Insured – Owners, Lessees Or Contractors – Automatic Status For Other Parties When Required In Written Construction Agreement

CG 20 42 Additional Insured – Automatic Status For Designated Operations

CG 20 43 Additional Insured – Automatic Status When Required In Written Contract Or Agreement

Analysis:

With continued requests to provide different types of automatic additional insured status options, ISO has designed several additional endorsements to provide automatic additional insured status for non-construction related risks relating to specific industries or certain exposures, thus eliminating the need to have written contractual requirements for each of these additional insureds.

With respect to endorsements CG 20 42 and CG 20 43, these endorsements do not apply to bodily injury or property damage included in the products-completed operations hazard. CG 20 42 contains a free-form schedule to allow flexibility in describing the operations to which the additional insureds apply. CG 20 43 ties the additional insured status to the fact that both parties must agree in writing in the contract or agreement that the additional insured be added to the policy. Professional services are excluded in this endorsement. Both of these endorsements are a broadening of coverage when attached to a policy.

Automatic Additional Insured Endorsements – Completed Operations

Two new automatic additional insured endorsements are added:

CG 20 39 Additional Insured – Owners, Lessees Or Contractors – Automatic Status When Required In Written Construction Agreement With You (Completed Operations)

CG 20 40 Additional Insured – Owners, Lessees Or Contractors – Automatic Status For Other Parties When Required In Written Construction Agreement (Completed Operations)

Analysis:

The above two new broadening endorsements will address the named insured's need to add additional insureds to completed operations. These endorsements provide automatic additional insured status with respect to completed operations to anyone the named insured has performed operations for if it is required in the written contract or agreement. Further, CG 20 40 also extends additional insured status to anyone the added additional insured is also required to add in the written contract or agreement, e.g., an upstream party.

Additional Insured Endorsement – Completed Operations Included in General Aggregate

CG 20 41 Additional Insured – Owners, Lessees Or Contractors – Completed Operations Subject To The General Aggregate

Analysis: This new additional insured endorsement will address those CGL classifications that include products-completed operations within the General Aggregate Limit. The applicable classifications are shown by a plus sign (+) in the ISO General Liability manual. With this endorsement, the named insured classified under a plus sign classification can add another party as an additional insured for completed operations.

Who Is An Insured Endorsements – Trusts and Volunteer Workers

Trusts

CG 34 05 Additional Insured – Trusts

Analysis:

This new optional endorsement is available for the Products/Completed Operations Liability Coverage Part, Pollution Liability Coverage Part, Pollution Liability Limited Coverage Part, and the Underground Storage Tank Policy. The endorsement amends Who Is An Insured to grant insured status to trusts if they are designated as Named Insureds on the policy Declarations, including the trustees of those trusts.

Volunteer Workers

CG 34 06 Additional Insured – Volunteer Workers (for use with Liquor Liability Coverage Forms CG 00 33 and CG 00 34)

CG 34 07 Additional Insured – Volunteer Workers (for use with Products/Completed Operations Liability Coverage Forms CG 00 37 and CG 00 38)

CG 34 08 Additional Insured – Volunteer Workers (for use with Pollution Liability Coverage Form – Designated Sites CG 00 39)

CG 34 09 Additional Insured – Volunteer Workers (for use with Pollution Liability Limited Coverage Form Designated Sites CG 00 40, and Underground Storage Tank Policy Designated Tanks CG 00 42)

Analysis:

The above new optional endorsements amend Who Is An Insured to provide additional insured status to volunteer workers, but only while performing duties related to the conduct of the insured's business. Attachment of these additional insured endorsements broadens coverage.

Volunteer Workers – Electronic Data Liability Coverage Part

CG 34 10 Exclusion – Volunteer Workers as Insureds removes express references to volunteer workers as insureds from the Who is An Insured section.

CG 34 11 Exclusion – Employees and Volunteer Workers as Insureds removes express references to volunteer workers as insureds and employees as insureds from the Who is An Insured section.

Analysis:

If either of the new exclusion endorsements CG 34 10 or CG 34 11 are on the policy, coverage is restricted, as these two new exclusion endorsements will revoke insured status for either volunteer workers as insureds, or volunteer workers and employees as insureds, under the Electronic Data Liability Coverage Part. (CG 00 65):

Employee and Volunteer Worker Exclusions

CG 21 37 Exclusion – Employees and Volunteer Workers as Insureds

Analysis:

ISO is making an editorial change in CG 21 37. This editorial change adds the words, "machinery or" in Paragraph B.g.(5)(b) to maintain consistency with the Commercial General Liability Coverage Form CG 00 01 and Paragraph A.5.b. of the endorsement.

CG 21 66 Exclusion – Volunteer Workers

Analysis:

ISO is making several editorial changes to endorsement CG 21 66 that do not alter coverage, but are simply to clarify intent. The first change adds "As Insureds" to the endorsement title for consistency with endorsement CG 21 37. Wording changes in the endorsement are made to better align the language with the definition of volunteer worker in the underlying form that indicates, in part, such worker is "a person who is not your "employee".

Additional Insured – Liquor Liability

CG 34 01 Additional Insured – Owners, Managers Or Lessors Of Premises – Liquor Liability

CG 34 02 Additional Insured – Grantor Of Franchise – Liquor Liability

CG 34 03 Additional Insured – State Or Governmental Agency Or Subdivision Or Political Subdivision – Permits Or Authorizations – Liquor Liability

CG 34 04 Additional Insured – Sponsor(s) – Liquor Liability

Background:

In response to insurer requests, ISO is introducing additional insured endorsements for use with the Liquor Liability Coverage Part, based on the following examples cited by ISO:

  • An owner of a building requires to be named as an additional insured when the lessee is in the business of selling, serving or furnishing alcoholic beverages.
  • A franchisor, as part of a franchising contract, may require additional insured status when that independent owner sells, serves or furnishes alcoholic beverages.
  • A municipality may require additional insured status if the insured is using government property to sell, serve or furnish alcoholic beverages.
  • A sponsor may request additional insured status when liquor liability operations are subcontracted to a vendor.

Recall that ISO previously introduced endorsement CG 20 01 Primary And Noncontributory – Other Insurance Condition, which reflected that coverage made available to an additional insured is provided on a "primary and noncontributory" basis. A revision to this endorsement will allow for its attachment to the Liquor Liability Coverage Part, with no coverage impact.

Analysis:

CG 34 01 Additional Insured – Owners, Managers Or Lessors Of Premises – Liquor Liability

Similar to endorsements CG 20 10 Additional Insured – Owners, Lessees Or Contractors – Scheduled Person Or Organization and CG 20 11 Additional Insured – Managers Or Lessors Of Premises, CG 34 01 permits scheduling an owner, manager or lessor as an additional insured. The additional insured is covered only with respect to liability for "injury" arising out of the selling, serving or furnishing of alcoholic beverages on that portion of the premises that is leased to the insured, who also must be listed in the Schedule.

CG 34 02 Additional Insured – Grantor Of Franchise – Liquor Liability

Similar to CG 20 29 Additional Insured – Grantor Of Franchise, this endorsement adds the person or organization listed in the Schedule as an additional insured. The additional insured is covered only with respect to liability as a grantor of a franchise to the insured and arising out of the selling, serving or furnishing of any alcoholic beverage by any insured.

CG 34 03 Additional Insured – State Or Governmental Agency Or Subdivision Or Political Subdivision – Permits Or Authorizations – Liquor Liability

This endorsement, though similar in format to endorsement CG 20 12 Additional Insured – State Or Governmental Agency Or Subdivision Or Political Subdivision – Permits Or Authorizations, contains a Schedule to list a governmental agency or political subdivision as an additional insured. The additional insured is covered only with respect to liability arising out of the selling, serving or furnishing of any alcoholic beverage where they issued a permit for use of their premises.

CG 34 04 Additional Insured – Sponsor(s) – Liquor Liability

This adds a person or organization listed in the Schedule as an additional insured but only with respect to liability as a sponsor of the scheduled event or function and arising out of the selling, serving or furnishing of any alcoholic beverage by any insured.

Each of the endorsements follow a similar format to the current additional insured endorsements with respect to the following:

  • such coverage afforded to the additional insured only applies to the extent permitted by law;
  • the coverage will not be broader than what is required by any contract or agreement that exists between the insured and the additional insured; and
  • the most that will be paid to the additional insured is the amount of insurance that is required by any existing contract or agreement or what is available under the applicable limits of insurance, whichever is less.

The new endorsements will broaden coverage to the extent that the additional insured in the Schedule has coverage for their vicarious liability arising out of the insured's selling, serving or furnishing of any alcoholic beverage. However, the endorsements will not increase the applicable limits of insurance:

New and Revised Exclusion Endorsements – Emerging Risks and Other Liabilities

Several new exclusion endorsements will address the emerging risks of marijuana, e-cigarettes, unmanned aircraft and genetically modified organisms, as well as the addition of earth movement exclusion endorsements. In addition, a number of new exclusion endorsements are being made available with respect to existing programs or coverages, including wrap-up programs, liquor liability BYO (bring your own alcohol), cross suits liability, hired auto liability, owners and contractors protective liability, and endorsements addressing specific risks such as pharmacists, optical goods and hearing aid stores.

Cannabis Exclusion Endorsements

Broad exclusion endorsements are introduced to exclude cannabis and cannabis-related exposures from the ISO CGL and its counterparts, namely: Commercial General Liability, Products/Completed Operations Liability, Owners and Contractors Protective Liability, Pollution Liability, Railroad Protective Liability, Electronic Data Liability, and the Product Withdrawal Coverage Parts. The broad exclusion endorsements exclude liability for cannabis goods or products, including resins, oils, wax, hash, hemp, infused liquids or edible cannabis, and exclude all types of cannabis and cannabis-related activity or events. The endorsements contain the same exclusionary language that excludes claims against any insured that allege negligence or other wrongdoing in the supervision, hiring, employment, training or monitoring of others by that insured.

The exclusion endorsements do contain an exception generally related to the actual, alleged, threatened or suspected inhalation, ingestion, absorption or consumption of, or contact with cannabis by an insured or any other person for whom the Named Insured is legally responsible. However, this exception only applies if the bodily injury or property damage does not arise out of the Named Insured's selling, serving or furnishing of cannabis to any person described in the exception. This would allow coverage for someone accidentally exposed to the product but not someone working with the product. An exception is also made for personal and advertising injury offenses addressing, in part, false arrest, detention or imprisonment; and wrongful eviction.

Further, there are additional cannabis exclusion endorsements that mirror the broad exclusion endorsements, but will make an exception for industrial hemp, where permitted by law.

All of the endorsements add the same definition of "cannabis", as follows:

C. The following definition is added to the Definitions section:

"Cannabis":

  1. Means:

Any good or product that consists of or contains any amount of Tetrahydrocannabinol (THC) or any other cannabinoid, regardless of whether any such THC or cannabinoid is natural or synthetic.

2.  Paragraph C.1. above includes, but is not limited to, any of the following containing such THC or cannabinoid:

  1. Any plant of the genus Cannabis L., or any part thereof, such as seeds, stems, flowers, stalks and roots; or
  2. Any compound, byproduct, extract, derivative, mixture or combination, such as:

(1) Resin, oil or wax;

(2) Hash or hemp; or

(3) Infused liquid or edible cannabis;

whether or not derived from any plant or part of any plant set forth in Paragraph C.2.a.

The endorsements providing the hemp exception do so by adding a separate paragraph excepting liability arising out of goods or products containing or derived from hemp, including but not limited to seeds, food, clothing, lotions, oils or extracts, building materials, or paper. The exceptions do not apply to the extent they are in prohibition or violation of any applicable state statute, regulation or ordinance.

The exception from the CGL reads as follows:

B. The exclusion in Paragraph A. does not apply to:

  1. "Bodily injury", "property damage" or "personal and advertising injury" arising out of goods or products containing or derived from hemp, including, but not limited to:

a. Seeds;

b. Food;

c. Clothing;

d. Lotions, oils or extracts;

e. Building Materials; or

f. Paper.

  1. "Property damage" to goods or products described in Paragraph B.1. above. However, Paragraphs B.1. and B.2. above do not apply to the extent any such goods or products are prohibited under an applicable state or local statute, regulation or ordinance in the state wherein:

(1) The "bodily injury" or "property damage" occurs;

(2) The "occurrence" which caused the "bodily injury" or "property damage" takes place; or

(3) The offense which caused the "personal and advertising injury" was committed

3. "Personal and advertising injury" arising out of the following offenses: a. False arrest, detention or imprisonment; or b. The wrongful eviction from, wrongful entry into, or invasion of the right or private occupancy of a room, dwelling or premises that a person occupies, committed by or on behalf of its owner, landlord or lessor.

Another endorsement option is a Cannabis Exclusion With Hemp and Lessors Risk Exceptions. This endorsement provides, in addition to the above hemp exception, an additional paragraph that provides a lessors risk exception, stated as follows:

"Bodily injury", "property damage" or "personal and advertising injury" arising out of the ownership, maintenance or use of a premises leased to others by you; or

The new CGL and its counterpart's cannabis exclusion endorsements are as follows:

CG 40 14 Cannabis Exclusion (for use with the CGL and Products/Completed Operations Liability Coverage Parts)

CG 34 46 Cannabis Exclusion (for use with the Owners and Contractors Protective Liability Coverage Part)

CG 34 50 Cannabis Exclusion (for use with the Pollution Liability Coverage Part)

CG 34 48 Cannabis Exclusion (for use with the Railroad Protective Liability Coverage Part)

CG 34 52 Cannabis Exclusion (for use with the Electronic Data Liability Coverage Part)

CG 34 54 Cannabis Exclusion (for use with the Product Withdrawal Coverage Part and the Limited Product Withdrawal Expense Endorsement)

CG 30 71 Cannabis Exclusion (for use with the Underground Storage Tank Policy)

The new cannabis exclusion with hemp exception (if permitted by law) endorsements are as follows:

CG 40 15 Cannabis Exclusion With Hemp Exception (for use with the CGL and Products/Completed Operations Liability Coverage Parts)

CG 34 47 Cannabis Exclusion With Hemp Exception (for use with the Owners and Contractors Protective Liability Coverage Part)

CG 34 51 Cannabis Exclusion With Hemp Exception (for use with the Pollution Liability Coverage Part) CG 34 49 Cannabis Exclusion With Hemp Exception (for use with the Railroad Protective Liability Coverage Part)

CG 34 53 Cannabis Exclusion With Hemp Exception (for use with the Electronic Data Liability Coverage Part)

CG 34 55 Cannabis Exclusion With Hemp Exception (for use with the Product Withdrawal Coverage Part and the Limited Product Withdrawal Expense Endorsement)

CG 30 72 Cannabis Exclusion With Hemp Exception (for use with the Underground Storage Tank Policy)

The cannabis exclusion with hemp (if permitted by law) and lessors risk exception endorsements are as follows:

CG 40 15 Cannabis Exclusion With Hemp and Lessors Risk Exceptions (for use with the CGL and Products/Completed Operations Liability Coverage Parts)

CG 40 16 Cannabis Exclusion With Hemp and Lessors Risk Exceptions (for use with the Owners and Contractors Protective Liability Coverage Part)

Electronic Cigarette Exclusion Endorsements

ISO has created two endorsements to exclude hazards in connection with e-cigarettes, including their component parts and accessories; and health hazards of electronic smoking or vaping devices. While these forms are not effective until December, with the current issues with vaping related lung illnesses, these exclusions could become significant. Both endorsements are optional for use with the CGL and the Products/Completed Operations Liability Coverage Parts:

CG 40 12 Exclusion – All Hazards In Connection With An Electronic Smoking Device, Its Vapor, Component Parts, Equipment And Accessories CG 40 13 Exclusion – Health Hazards, Electronic Smoking Device Vapor

Both endorsements add a definition for "electronic smoking device" described as a battery-powered device that delivers a vaporized inhalable substance through a mouthpiece. The definition provides a number of examples of such devices, but makes it clear that warm steam or mist inhalers are not "electronic smoking devices". The exclusion is geared towards vaping devices for recreational smoking, not therapeutic medical devices to provide medication or treatments.

Exclusion CG 40 12 addresses the design, manufacture, distribution, sale, maintenance, use or repair of an electronic smoking device or any component parts, accessories, or equipment designed to be used with such device. The endorsement also excludes exposures related to inhaling the device's vapor.

The exclusion reads as follows:

  1. This insurance does not apply to:

    Electronic Smoking Device

    "Bodily injury", "property damage" or "personal and advertising injury" arising out of the following:

  1. The design, manufacture, distribution, sale, maintenance, use or repair of: a. An "electronic smoking device"; or b. Any component part of, or equipment or accessory designed for use with an "electronic smoking device", including, but not limited to, a mouthpiece, tube, tank, connector, atomizer, cartomizer, clearomizer, coil, battery, charger, cartridge, liquid, flavoring, solutions of any kind, or ingredients therein;
  2. The actual, alleged, threatened or suspected inhalation of, contact with, exposure to, existence of, or presence of, vapor delivered from an "electronic smoking device"; or
  3. Any component part of, or equipment or accessory designed for use with an "electronic smoking device", including, but not limited to those items listed in Paragraph A.1.b. of this endorsement, and in connection with the actual, alleged, threatened or suspected inhalation of, contact with, exposure to, existence of, or presence of, vapor delivered from an "electronic smoking device",

The following definition is added:

B.  "Electronic smoking device" means a battery-powered device that delivers a vaporized inhalable substance through a mouthpiece. "Electronic smoking devices" include, but are not limited to, battery-powered:

  1. Cigarettes
  2. Pipes;
  3. Cigars;
  4. Hookahs; and
  5. Vaporizers, other than steam or mist inhalers.

Exclusion CG 40 13 uses the same definition for "electronic smoking device" as in CG 40 12, but the endorsement exclusion applies only to "bodily injury". A coverage exception applies to bodily injury arising out of the explosion, bursting, or rupturing of an electronic smoking device or component parts, equipment or accessories for use with such devices, for any reason. An explosion is strictly related to the equipment used to vape the product, and not the product itself. Along with the equipment itself, the exclusion addresses the vapor as well, which could have unknown long term effects.

A. The following exclusion is added:

This insurance does not apply to:

Electronic Smoking Device Vapor

"Bodily injury" arising out of the following:

  1. The actual, alleged, threatened or suspected inhalation of, contact with, exposure to, existence of, or presence of, vapor delivered from an "electronic smoking device"; or
  2. Any component part of, or equipment or accessory designed for use with, an "electronic smoking device", including, but not limited to, a mouthpiece, tube, tank, connector, atomizer, cartomizer, clearomizer, coil, battery, charger, cartridge, liquid, flavoring, solutions of any kind, or ingredients therein, in connection with the actual, alleged, threatened or suspected inhalation of, contact with, exposure to, existence of, or presence of, vapor delivered from an "electronic smoking device".

However, this exclusion does not apply to "bodily injury" arising out of the explosion, bursting, or rupturing, of an "electronic smoking device" or any component part, equipment or accessory, designed for use with an "electronic smoking device", for any reason.

New and Revised Controlled (Wrap-Up) Insurance Program Endorsements

ISO is making editorial changes to two existing endorsements and adding several optional endorsements for use with wrap-up programs, projects, or locations. A major editorial change adds a definition of "controlled (wrap-up) insurance program" that among other changes replaces the word "consolidated" with "controlled", and existing endorsements are retitled accordingly to reflect this change. The revised endorsements can be used on risks enrolled in construction wrap-up programs, or non-construction projects, and include multiple wrap-ups, projects or locations. The definition of a controlled (wrap-up) insurance program contemplates programs involving either insurance or self-insurance covering all contractors or subcontractors working on one or more projects.

The revised endorsements are:

CG 21 31 Limited Exclusion – Designated Operations Covered By A Controlled (Wrap-Up) Insurance Program (formerly titled Limited Exclusion – Designated Operations Covered By A Consolidated (Wrap-Up) Insurance Program)

CG 21 54 Exclusion – Designated Operations Covered By A Controlled (Wrap-Up) Insurance Program (formerly titled Exclusion – Designated Operations Covered By A Consolidated (Wrap-Up) Insurance Program)

In addition to adding the definition of "controlled (wrap-up) insurance program" to these endorsements, Paragraph A. is changed to the effect that:

The first paragraph will emphasize that the exclusion to bodily injury and property damage applies to ongoing operations as well as those included within the products-completed operations hazard at location(s) described in the endorsement Schedule; and The exclusion will apply only if the Named Insured is enrolled in the controlled (wrap-up) insurance program.

Other editorial changes to the endorsements provide for consistency in wording with other CGL endorsements and to conform to ISO uniformity standards, with no change in coverage.

If either of the newly revised endorsements replaces the existing endorsement on a policy, this will result in broadened coverage.

The newly added definition of "controlled (wrap-up) insurance program" reads as follows:

"Controlled (wrap-up) insurance program" means a centralized insurance program under which one party has secured either insurance or self-insurance covering some or all of the contractors or subcontractors performing work on one or more specific project(s).

This same definition appears in the newly created endorsements for use with this program.

The following new optional endorsements are for use with the CGL Coverage Part:

CG 40 07 Exclusion – Designated Operations Covered By A Controlled (Wrap-Up) Insurance Program – Limited Exception for Additional Insureds

CG 40 08 Limited Exclusion – Designated Operations Covered By A Controlled (Wrap-Up) Insurance Program – Limited Exception for Additional Insureds

The above endorsements are similar to CG 21 54 and CG 21 31, respectively, however they provide a limited exception for any person or organization as an additional insured who is not enrolled in a wrap-up program with respect to the location shown in the endorsement Schedule. Therefore, if either endorsement is a replacement of CG 21 54 or CG 21 31, coverage will be broadened; however as newly attached endorsements they are exclusions, thereby reducing coverage.

The following optional endorsements are for use with the Products/Completed Operations Liability Coverage Part. Since they are newly added exclusions, attachment of any of these endorsements will reduce coverage.

CG 34 24 Exclusion – Designated Operations Covered By A Controlled (Wrap-Up) Insurance Program

CG 34 25 Limited Exclusion – Designated Operations Covered By A Controlled (Wrap-Up) Insurance Program

CG 34 26 Exclusion – Designated Operations Covered By A Controlled (Wrap-Up) Insurance Program – Limited Exception for Additional Insureds

CG 34 27 Limited Exclusion – Designated Operations Covered By A Controlled (Wrap-Up) Insurance Program – Limited Exception for Additional Insureds

Earth Movement Exclusion Endorsements

Several newly added endorsements for use with the CGL Coverage Part will address risks with operations that increase exposures related to earth movement and unnatural seismic activity. Examples of such operations include excavation or tunneling, hydraulic fracturing, bridge culvert building, or other activities involving explosives. Natural seismic activity is earthquakes and volcanic tremors; unnatural activity is that created by humans.

The newly added endorsements are:

CG 40 04 Exclusion – Earth Movement

CG 40 05 Exclusion – Earth Movement – Completed Operations

CG 40 06 Earth Movement – Exclusion For Designated Operation(s) Or Project(s)

CG 34 23 Exclusion – Earth Movement

These endorsements are available for risks with contractor operations. The purpose of these endorsement options are to exclude coverage in varying degrees for bodily injury and property damage arising out of earth movement that is either caused by or allegedly caused by, in whole or in part, or aggravated by or allegedly aggravated by, contractor operations. To the extent such exposure exists, attachment of any of these endorsements may restrict coverage.

CG 40 04 is for use with the CGL and restricts the exclusion to "your work" as defined in the policy.

CG 40 05 is for use with the CGL or the Products/Completed Operations Liability Coverage Parts, and restricts the exclusion to "your work" included in the "products-completed operations hazard".

CG 40 06 is for use with the CGL or the Products/Completed Operations Liability Coverage Parts, and restricts the exclusion to operations or projects described in the endorsement Schedule that are related to "your work".

CG 34 23 is for use with the Owners and Contractors Protective Liability Coverage Part and restricts the exclusion to operations performed for the Named Insured by the "contractor".

Each of the endorsements defined "earth movement" as:

"Earth movement" means:

  1. Earthquake, including tremors and aftershocks and any earth sinking, rising or shifting related to such event;
  2. Landslide, including any earth sinking, rising or shifting related to such event;
  3. Mine subsidence, meaning subsidence of a man-made mine whether or not mining activity has ceased; or
  4. Earth sinking, rising or shifting including soil conditions which cause settling, cracking or other disarrangement of foundations or other parts of realty. Soil conditions include contraction, expansion, freezing, thawing, erosion, improperly compacted soil and the action of water under the ground surface.

Cross Suits Liability Exclusion Endorsements

The existing endorsement CG 21 41 Exclusion – Intercompany Products Suits will now include the term "suit" within the endorsement, as follows:

This insurance does not apply to any claim made or "suit" brought for damages by any Named Insured against another Named Insured because of "bodily injury" or "property damage" arising out of "your products" and included within the "products-completed operations hazard".

In addition, ISO has created the following new cross suits exclusion endorsements to the extent that a cross suits exposure between Named Insureds exists under additional CGL Coverage Parts, similar to CG 21 41:

CG 40 10 Exclusion – Cross Suits Liability (for use with Commercial General Liability Coverage Part)

CG 34 28 Exclusion – Cross Suits Liability (for use with Owners And Contractors Protective Liability Coverage Part – Coverage For Operations Of Designated Contractor)

CG 34 29 Exclusion – Cross Suits Liability (for use with Pollution Liability Coverage Part – Designated Sites)

CG 34 30 Exclusion – Cross Suits Liability (for use with Pollution Liability Limited Coverage Part – Designated Sites)

CG 34 31 Exclusion – Cross Suits Liability (for use with Railroad Protective Liability Coverage Part)

CG 34 39 Exclusion – Cross Suits Liability (for use with Electronic Data Liability Coverage Part)

CG 34 45 Exclusion – Cross Suits Liability (for use with Liquor Liability Coverage Part)

CG 30 70 Exclusion – Cross Suits Liability (for use with Underground Storage Tank Policy Designated Tanks)

To the extent the exposure exists, attachment of any of these endorsements will reduce coverage with respect to the exposure related to cross suits liability.

Hired Auto Liability Exclusion Endorsement

Businesses such as logistics companies, aka "shippers", may be subject to vicarious liability when an accident involves vehicles owned by motor carriers but hired by the shipper. Having been made aware of suits against shippers alleging negligent hiring, or the shipper exercising some control over the motor carrier/driver, ISO has created CG 40 11 Exclusion – Hired Auto Liability. This optional endorsement is available for when the exposure to hired autos may be expected; or when the Named Insured assumes liability under an insured contract for the maintenance, use or entrustment of any hired auto. If such exposure exists, attachment of the endorsement will reduce coverage for bodily injury and property damage liability with respect to such exposures as they relate to a hired auto.

CG 40 11 amends Coverage A of the CGL by adding the hired auto liability exclusion wording to exclusion g. Aircraft, Auto Or Watercraft under Paragraph 2. Exclusions, as follows:

A. This insurance does not apply to:

g. Aircraft, Auto Or Watercraft

"Bodily injury" or "property damage" arising out of the maintenance, use or entrustment to others of any "hired auto".

Use includes operation and "loading or unloading".

This exclusion applies even if the claims against any insured allege negligence or other wrongdoing in the supervision, hiring, employment, training or monitoring of others by that insured, if the "occurrence" which caused the "bodily injury" or "property damage" involved the maintenance, use or entrustment to others of any "hired auto".

B. For the purposes of this endorsement, the following definition is added:

"Hired auto" means any "auto":

1. Leased to, for or by any insured; or 2. Hired or borrowed for or by any insured.

Genetically Modified Organism Exclusion Endorsements

In 2015, ISO introduced various exclusion options under the Farm Program relating to genetically modified produce, crops, plans, animals and fish. Generally, a genetically modified organism (GMO) is described as a virus, bacterium, or more complex life form in which the genetic material (DNA) has been altered for some purpose, e.g., to change the traits and functions of the recipient organism. The most common types of GMOs developed for commercial use are GMO crop plant species, e.g., maize, soybean, oilseed, and cotton. As such, ISO is adding the following optional endorsements for use with the CGL and Products/Completed Operations Liability Coverage Parts to exclude liability arising out of genetic modification, either by design or by accident. Seeds or pollen from genetically modified crops can be transmitted to no GMO crops, changing those crops as well. The endorsements are:

CG 34 15 Genetically Modified Organism Exclusion

CG 34 16 Genetically Modified Organism Exclusion For Designated Operations Or Products

CG 40 01 Genetically Modified Organism Exclusion

CG 40 02 Genetically Modified Organism Exclusion For Designated Operations Or Products

Since the current policy exclusions do not limit GMO liability, any of these endorsements will reduce coverage. Each of the endorsements are similar to CG 40 01, which amends the CGL Coverage Part. This endorsement reads as follows:

A. The following exclusion is added to Paragraph 2. Exclusions under Section I – Coverages, Coverage A – Bodily Injury And Property Damage Liability:

This insurance does not apply to:

Genetically Modified Organism

"Bodily injury" or "property damage" arising directly or indirectly out of the "genetic modification", whether by design or accident, of any organism.

B. The following exclusion is added to Paragraph 2. Exclusions under Section I – Coverages, Coverage B – Personal And Advertising Injury Liability:

This insurance does not apply to:

Genetically Modified Organism

"Personal and advertising injury" arising directly or indirectly out of the "genetic modification", whether by design or accident, of any organism.

C. The following definitions are added to the Definitions section:

1. "Genetic modification" means the insertion of a modified gene or a gene from another variety or species into an organism by "genetic engineering".

However, "genetic modification" does not include the traditional horticultural practices of:

a. Plant breeding by methods other than "genetic engineering"; or b. Plant grafting.

2. "Genetic engineering" means the use of technology in order to change the genetic makeup of cells or to move genes across species boundaries.

Revised Athletic Or Sports Participants Exclusion and Colleges Or Schools Endorsements

ISO is revising the following endorsements:

CG 21 10 Exclusion – Athletic Or Sports Participants

CG 22 71 Colleges Or Schools (Limited Form)

CG 22 72 Colleges Or Schools

In addition, the following new endorsement is added for use with the CGL Coverage Part:

CG 40 03 Exclusion – Athletic Or Sports Participants – All Contests Or Exhibitions

Analysis:

Already a mandatory endorsement for certain classifications, the current CG 21 01 Exclusion – Athletic Or Sports Participants excludes coverage under Coverage A with respect to operations described in the endorsement Schedule, for bodily injury to anyone practicing for or participating in any insured-sponsored sports or athletic contest or exhibition. Because of the increase in concussion-related liability lawsuits and the long-term effects of repeated concussions resulting from participation in amateur and professional sports and activities, ISO is revamping this exclusion. The revised endorsement will address liability with respect to certain requirements in Return to Play laws, and add in the negligent supervision language contained in other liability exclusion endorsements, to apply to the participation or practicing of any sports or athletic contests or exhibitions. To address latent injuries, the language "while practicing for or participating in" is revised to "arising out of practicing for or participating in".

A new endorsement, CG 40 03 Exclusion – Athletic Or Sports Participants – All Contests Or Exhibitions, is similar to CG 21 01 but applies to any operation listed in the endorsement Schedule, whether or not the named insured sponsors the event.

Further, endorsements CG 22 71 Colleges Or Schools (Limited Form) and CG 22 72 Colleges Or Schools are revised so that the negligent supervision language will also apply to the participation or practicing of any sports or athletic contests or exhibitions, and this will apply to both Coverages A and B. Allowing injured athletes to continue playing after receiving an injury has become an issue, as there are cases where further injury was caused by allowing the athlete to continue. In addition, an exclusion is added with respect to the operation of any college or school by the Named Insured or on their behalf, as follows:

This insurance does not apply to "bodily injury" to any person while practicing for or participating in any sports or athletic contest or exhibition if there is no direct management, organization or supervision of such sports or athletic contest or exhibition by any insured.

With the exception of the newly introduced CG 40 03 exclusion, which may result in a coverage restriction with respect to events not sponsored by the insured, the revised endorsements simply reinforce the original coverage intent and therefore do not affect coverage.

New Liquor Liability Exclusion With Limited Exception for BYO Endorsement

A new optional endorsement will further address BYO (Bring Your Own) establishments permitting any person to bring alcoholic beverages on the named insured's premises, for consumption on those premises:

CG 40 09 Amendment of Liquor Liability Exclusion – Limited Exception For Bring Your Own Alcohol

Analysis:

This endorsement is similar to CG 21 50 Amendment of Liquor Liability Exclusion. However, where CG 21 50 (and CG 21 51) applies the liquor liability exclusion for the BYO exposure (except as scheduled in CG 21 51), CG 40 09 provides coverage for the BYO exposure by adding an exception to the exclusion, similar to that in the CGL Coverage Forms CG 00 01 and CG 00 02. The exception states that allowing people to bring alcohol onto the premises, whether or not a fee is charged or a license is required, is not considered an act of selling, serving, or furnishing alcoholic beverages.

If CG 40 09 replaces either CG 21 50 or CG 21 51, coverage is broadened; however as a newly added exclusion endorsement, coverage will be reduced.

New Owners And Contractors Protective Liability Pollution Exclusion Endorsements

The following new optional endorsements are adaptations of existing pollution exclusion endorsements already available for use with the CGL. These endorsements will provide additional options with respect to pollution exposures for use with the OCP Coverage Part:

CG 34 32 Total Pollution Exclusion

CG 34 33 Total Pollution Exclusion With A Hostile Fire Exception

CG 34 34 Total Pollution Exclusion With A Building Heating, Cooling And Dehumidifying Equipment Exception And A Hostile Fire Exception

CG 34 32 excludes all pollution related exposures, similar to CG 21 49

CG 34 33 excludes all pollution exposures, with an exception for hostile fire, similar to CG 21 55.

CG 34 34 excludes all pollution exposures, with exceptions for hostile fire and building heating, cooling and dehumidifying equipment, similar to CG 31 65.

New Unmanned Aircraft Endorsements – OCP and RRP

Following similar optional endorsements already available for use with the CGL Coverage Part addressing drone-related liability, ISO is introducing several optional endorsements for use with the Owners And Contractors Protective Liability Coverage Part (OCP) and the Railroad Protective Liability Coverage Part (RRP).

CG 34 20 Limited Coverage For Designated Unmanned Aircraft

CG 34 21 Exclusion – Unmanned Aircraft

CG 34 22 Limited Coverage For Designated Unmanned Aircraft

Analysis:

CG 34 20 is for use with the OCP Liability Coverage Part and is similar to CG 24 51, providing limited coverage for bodily injury and property damage with respect to a designated "unmanned aircraft".

CG 34 21 is for use with the RRP Liability Coverage Part and is similar to CG 29 60, excluding coverage for bodily injury, property damage and physical damage to property arising out of the ownership, maintenance, use or entrustment to others of any aircraft that is an "unmanned aircraft".

CG 34 22 is for use with the RRP Liability Coverage Part and is similar to CG 24 51, providing limited coverage for bodily injury, property damage and physical damage to property with respect to a designated "unmanned aircraft".

An "unmanned aircraft" is defined as one not designed or manufactured to be operated by a person from within or on the aircraft itself. Drones come in a variety of sizes so the important distinction is in the operation; a craft operated by an individual not in actual physical contact with the craft is unmanned.

New and Revised Pharmacists Endorsements

ISO is revising the following endorsements:

CG 22 36 Exclusion – Limited Products and Professional Services – Pharmacists (formerly titled Exclusion – Products and Professional Services (Druggists)

CG 22 69 Pharmacists (formerly titled Druggists)

CG 22 97 Pharmacists – Broadened Coverage (formerly titled Druggists – Broadened Coverage)

The following new endorsement is added for use with the CGL Coverage Part:

CG 23 02 Exclusion – Professional Services – Pharmacists

Analysis:

Based on insurer input, changes have occurred in retail community pharmacies and state or federal laws affecting pharmacy retail operations and pharmacist services.Therefore, coverages need to be adjusted accordingly.

For risks that include the Drugstore classification, ISO requires that one of three available endorsements be attached to address the professional services of pharmacists, CG 22 36, CG 22 69 or CG 22 97. With this revision, these endorsements will now address state or federal laws that permit pharmacists to provide additional services beyond professional health care services, and will also address expanded pharmacy operations, such as retail sales and non-urgent care medical clinics. The newly titled endorsements will also replace the term "druggists" with "pharmacists".

Endorsement CG 22 36 has been revised and retitled to Exclusion – Limited Products and Professional Services. The products/completed operations hazard exclusion will now apply only to bodily injury or property damage arising out of the insured's products dispensed or sold in connection with the pharmacist's services, e.g., prescription drugs. The exclusion will not apply to other products sold in conjunction with the retail operations of the business, such as over-the-counter drugs, beauty or personal care, household goods, food and beverages, and other consumer goods. If this endorsement replaces CG 22 36 on a policy, coverage may be broadened; but as a newly added exclusion, coverage will be reduced.

The current endorsement CG 22 69 was previously updated to include an exception for services performed by a pharmacist with respect to the administering of vaccinations in accordance with law. The newly revised endorsement will reflect the new title Pharmacists and include the following changes as well as a few editorial changes:

  • A provision addressing state or federal laws affecting professional services provided by pharmacists;
  • The exclusion for willful violation of a penal statute or ordinance is expanded to apply to the willful violation of applicable state or federal laws governing pharmacists, not just sales of pharmaceuticals;
  • The exclusion for specific services performed by a pharmacist will apply to all tests, not just blood tests;
  • The exclusion for specific services performed by a pharmacist will no longer list managing drug therapy from the list of excluded services;
  • A reference to "volunteer workers" has been added for consistency with the wording of the Who Is An Insured section in the CGL.

By removing the managing drug therapy from the list of excluded services, this revision will broaden coverage; however, the other listed changes may result in reduced coverage.

The revised endorsement CG 22 97 with its new title, Pharmacists – Broadened Coverage, will include the first two changes listed above for CG 22 69, and in addition the negligent supervision language contained in CG 22 69 will be added to CG 22 97 for consistency. This revision has no impact on coverage; however in states where courts have ruled professional services exclusions to be not applicable to negligent supervision and similar claims, this could result in a reduction of coverage in those states.

The newly introduced endorsement CG 23 02 Exclusion – Professional Services – Pharmacists, is similar to CG 22 36, but does not apply the exclusion to bodily injury or property damage included within the products-completed operations hazard. If this endorsement replaces CG 22 36 on a policy, coverage may be broadened; but as a newly added exclusion, coverage will be reduced.

New and Revised Optical and Hearing Aid Establishments Endorsements

For risks with either classification 13759 Hearing Aid Stores or 15839 Optical Goods Stores, ISO requires that one of two available endorsements be attached to address the professional services of these establishments:

CG 22 37 Exclusion – Products and Professional Services (Optical and Hearing Aid Establishments)

CG 22 65 Optical And Hearing Aid Establishments

Analysis:

Product expansions and increased services have led ISO to revise endorsement CG 22 65 to accommodate the increased exposures brought about by these changes. A number of hearing aid establishments may sell products unrelated to hearing aid devices, such as batteries, battery rechargers, wireless microphones, noise mitigating accessories, remote controls, cordless home phones, and TV/audio streaming accessories. Optical goods stores may provide ophthalmic professional services separate from the preparation, fitting and sales of corrective lenses, generally related to optometric services, such as eyeglasses, contact lenses, sunglasses, and cleaning accessories. As such, the endorsement has been revised to reinforce and maintain coverage consistency as designed, with no change in coverage. The form has been revised as follows:

  • The insuring agreement of the endorsement, by replacing "including" with "the following" will maintain coverage consistency by designating the professional health care services to be those specifically listed rather than those 'included';
  • Clarifying language, "For purposes of this endorsement" has been added to the intro of Paragraph B. of the endorsement;
  • A reference to "volunteer workers" has been added for consistency with the wording of the Who Is An Insured section in the CGL.

A new optional endorsement is added:

CG 23 03 Exclusion – Professional Services – Optical and Hearing Aid Establishments

This endorsement is similar to CG 22 37, except that it does not apply the exclusion to bodily injury or property damage included within the products-completed operations hazard. If attached as a replacement of CG 22 37, coverage may be broadened; however as a newly added endorsement it will reduce coverage.

Revised Unit Owners Additional Insured Endorsement

The following endorsement is revised:

CG 20 17 Additional Insured – Unit Owners Of Townhouse Or Homeowner Associations (formerly titled Additional Insured – Townhouse Associations)

Analysis:

ISO had previously amended the Townhouse Associations classification 68500 to clarify that the classification could include homeowners associations. Consistent with this amendment, endorsement CG 20 17 is re-titled and revised to include unit owners of homeowner associations.

Added wording restricts coverage to the unit owner for liability arising out of maintenance, use or repair of a portion of the premises (common area) that is reserved for the unit owner's exclusive use or occupancy, e.g., assigned parking area, garden plot, storage closets or lockers. Other revisions are made to provide for consistency of wording with provisions of other additional insured endorsements, and to conform to ISO uniformity standards.

New and Revised Endorsements – Policy Conditions

A number of new and revised endorsements will address such concerns as subrogation waivers, noncompliance with premium audits, access or disclosure of confidential or personal information with respect to electronic data liability, product withdrawal expense, and worldwide coverage.

Waiver Of Transfer Of Rights Of Recovery Against Others To Us (Waiver of Subrogation)

Revised endorsements:

CG 24 04 Waiver Of Transfer Of Rights Of Recovery Against Others To Us (Waiver of Subrogation) (formerly Waiver Of Transfer Of Rights Of Recovery Against Others To Us)

CG 29 88 Waiver Of Transfer Of Rights Of Recovery Against Others To Us (Waiver of Subrogation) (formerly Waiver Of Transfer Of Rights Of Recovery Against Others To Us) – for use with the Owners And Contractors Protective Liability Coverage Part

Analysis:

ISO has revised the above endorsements in response to agent and insurer requests to allow for more flexibility in addressing rights of recovery waivers. The current optional waiver of subrogation endorsements are used when an insured has already waived his or her right to take legal action against a party(ies) prior to a loss. By adding that person or organization to the endorsement Schedule, the insurer agrees to waive its subrogation rights against that person or organization. However, the current endorsements may not accommodate all of the scenarios of an insured's need to waive their right of recovery against other parties. Examples include upstream parties such as property owners, lessors, managers, suppliers or vendors, particularly when the insured does not have a written contract directly with the other party against whom it is waiving its right of recovery.

Endorsement CG 24 04 will allow for various situations where the insured has agreed to waive its right of recovery by removing provisions that expressly address the named insured's ongoing operations or work done under a contract with the person(s) or organization(s) shown in the endorsement schedule. Further, a provision will now state that the waiver of the insurer applies only to the extent that the insured has waived its right of recovery and that the insured's waiver occurred prior to loss. The endorsement will be available for use with the following: Liquor Liability Coverage Part, Electronic Data Liability Coverage Part, Pollution Liability Coverage Part – Designated Sites, Pollution Liability Limited Coverage Part – Designated Sites, Underground Storage Tank Policy, and Railroad Protective Liability Coverage Part. Endorsement CG 29 88 is revised with similar changes as CG 24 04.

New endorsements:

In addition, ISO is adding the following new endorsements:

CG 24 53 Waiver Of Transfer Of Rights Of Recovery Against Others To Us (Waiver of Subrogation) – Automatic – for use with the CGL Coverage Part, Liquor Liability Coverage Part, Electronic Data Liability Coverage Part, Pollution Liability Coverage Part – Designated Sites, Pollution Liability Limited Coverage Part – Designated Sites, Products/Completed Operations Liability Coverage Part, Underground Storage Tank Policy, and Railroad Protective Liability Coverage Part

CG 34 17 Waiver Of Transfer Of Rights Of Recovery Against Others To Us (Waiver of Subrogation) – for use with the Product Withdrawal Coverage Part

CG 34 18 Waiver Of Transfer Of Rights Of Recovery Against Others To Us (Waiver of Subrogation) – Automatic – for use with the Product Withdrawal Coverage Part

CG 34 19 Waiver Of Transfer Of Rights Of Recovery Against Others To Us (Waiver of Subrogation) – for use with the Owners And Contractors Protective Liability Coverage Part

Analysis:

Adding the word Automatic to the title of the above endorsements waive the insurer's right of recovery on a blanket basis to the extent the insured has waived its right of recovery in a written contract or agreement.

Premium Audit Noncompliance Charge Endorsements

The Premium Audit condition in the CGL states the premiums will be computed in accordance with the insurer's rules, and the advance premium shown in the Declarations is a deposit premium only. Dependent upon the audit period, the insurer will compute the earned premium using the exposure base known at the end of the audit period and send notice to the insured. The policy requires that the insured keep records of information needed to compute the premium and send copies of those records as often as the insurer requests. If the insurer is remiss in allowing such audits to take place, this poses unnecessary time delays and compounds costs for the insurer in their attempt to complete the audit process. As such, the following endorsements are added, with no impact on the coverage provided, but implementing possible additional charges for the insured's noncompliance with the Premium Audit condition:

CG 99 09 Premium Audit Noncompliance Charge

CG 99 10 Premium Audit Noncompliance Charge

Analysis:

Both of the above new endorsements act to implement certain provisions for noncompliance with the Premium Audit condition. In addition to the CGL coverage forms, CG 99 09 amends the Liquor Liability, Products/Completed Operations Liability, Pollution Liability, Underground Storage Tank Liability, and the Electronic Liability coverage parts; and CG 99 10 amends the Owners and Contractors Protective Liability Coverage Part. Since the endorsements are identical except that the phrase first named insured is replaced with "contractor" in CG 99 10, we will focus our review on CG 99 10.

The endorsement adds a provision for a noncompliance charge to apply if the insured fails to comply with the request for information needed for premium computation, determined by multiplying an audit noncompliance charge factor by the Total Advance Premium shown in the Declarations or endorsement Schedule. The endorsement includes an example illustrating how the noncompliance charge is assessed, which we have expanded upon below.

The endorsement also requires that the insurer make a specified number of written attempts (the number shown in the Schedule of the endorsement) to obtain audit information from the first insured to apply only to audits at the end of the policy period, for no less than an annual basis.

Further, the endorsement adds a provision allowing for reassessment of the premium audit after the insured receives the bill for the audit noncompliance charge, if indicated in the endorsement Schedule. The added provision requires the insured to notify the insurer in writing that they will comply with the audit before the due date shown on the bill, and the insured will then have 30 days upon the insurer's receipt of that written notification to comply with the premium audit. If the insured then complies with the audit, the audit noncompliance charge will no longer apply; however, any reassessment charge will still apply. If the insured still fails to comply after the 30 days has passed, both the audit noncompliance charge and the reassessment charge will be billed as final.

To illustrate, let's say the insured has not kept adequate records and the insurer is not able to compute the audit premium based on the information provided. The endorsement Schedule shows that the insurer must make three written attempts to the first named insured to obtain the information needed to calculate the audit premium. The insurer sends requests giving the insured until 9/30 to submit the documentation. In this illustration, the insured has to provide the insurer with three documents to be in compliance. He sends the first two documents right away, but neglects to provide the third document as requested.. At this point, the insured is in noncompliance with the Premium Audit condition and is subject to the audit noncompliance charge.

In this example, the total advance premium is $25,000 and the audit noncompliance charge factor is 1; therefore, the insured will receive a bill for the audit noncompliance charge of $25,000, with a due date shown on the bill of 9/30. On 9/10, the insured sends a written notification to the insurer advising they will provide the requested documentation by 9/30. The insurer receives the notification on 9/12, giving the insured until 10/2 to provide the documentation. If the insurer does not receive the documentation by 10/2, the insured will be sent a final bill requiring payment of the original audit noncompliance charge of $25,000, plus the reassessment charge as indicated on the endorsement Schedule (the final due), with full payment due by the due date shown on the bill.

New and Revised Electronic Data Liability Endorsements

Electronic Data Liability – Access or Disclosure of Confidential or Personal Information

New endorsements:

With this revision, ISO is adding several exclusionary endorsements to address the access to or disclosure of confidential or personal information:

CG 21 06 Exclusion – Access Or Disclosure Of Confidential Or Personal Information And Data-Related Liability – With Limited Bodily Injury Exception

CG 21 07 Exclusion – Access Or Disclosure Of Confidential Or Personal Information And Data-Related Liability – Limited Bodily Injury Exception Not Included

CG 21 08 Exclusion – Access Or Disclosure Of Confidential Or Personal Information (Coverage B Only)

While CG 21 06 is a mandatory endorsement, either CG 21 07 or CG 21 08 may be used instead of CG 21 06.

Analysis:

Form CG 21 06 excludes coverage for personal and advertising injury arising out of any access to or disclosure of any person's or organization's confidential information under Coverage B; and under Coverage A the electronic data exclusion is combined with the same exclusionary provision. This endorsement maintains the limited exception for bodily injury with respect to electronic data.

Form CG 21 07 differs from CG 21 06 in that it does not contain the exception for bodily injury with respect to electronic data.

Form CG 21 08 differs from CG 21 06 in that it does not contain the added exclusion with respect to Coverage A.

Revised endorsement:

CG 04 37 Electronic Data Liability

Analysis:

ISO has revised CG 04 37 Electronic Data Liability and it may be used in lieu of any of the above new endorsements. While the form generally includes similar exclusions addressing access or disclosure of confidential or personal information as CG 21 06, there are two scenarios not addressed in CG 04 37:

  1. Providing electronic data liability coverage without the limited bodily injury exception of Coverage A;
  2. Providing electronic data liability coverage without the exclusion for access or disclosure of confidential or personal information, or data-related liability under Coverage and excluding it under Coverage B.

New endorsements:

ISO is introducing two new optional endorsements, either of which may be used in lieu of CG 04 37 under the CGL Coverage Part:

CG 04 71 Electronic Data Liability – Limited Bodily Injury Exception Not Included

CG 04 72 Electronic Data Liability Coverage (Coverage A) With Access or Disclosure of Confidential or Personal Information Exclusion (Coverage B)

Analysis:

While CG 04 71 is similar to CG 04 37, this endorsement does not contain the bodily injury exception, and aligns with the broader electronic data exclusion of CG 21 07, thereby addressing the first scenario described above. If either endorsement CG 21 06 or CG 21 07 is added to CG 04 71, this will result in a broadening of coverage.

If endorsement CG 04 71 is used in lieu of CG 04 37, this will broaden the data-related liability coverage under Coverage A, but reduce the bodily injury coverage under both Coverage A and Coverage B.

Form CG 04 72 aligns with the provisions of CG 21 08, and thereby addresses the second scenario above. If endorsement CG 21 08 is added to CG 04 71, this will broaden the data-related liability coverage under Coverage A, but reduce coverage by adding the exclusion for access or disclosure of confidential or personal information in Coverage A. There is no impact on coverage under Coverage B.

If CG 04 72 is used in lieu of CG 04 37, this will broaden the coverage under Coverage A, but reduce coverage under Coverage B by adding the exclusion. If CG 21 06, CG 21 07, or CG 21 08 is attached to CG 04 72, coverage will be broadened.

Revised Product Withdrawal Expense Endorsement 

Revised endorsement:

CG 04 36 Limited Product Withdrawal Expense Endorsement

Analysis:

In the 12 04 edition of CG 04 36 this endorsement ISO added Deductible And Participation Percentage Provisions to Paragraph B that included a paragraph under the Deductible requiring the insured to reimburse the insurer for any deductible amount the insurer pays to effect settlement of a claim or suit.

Since the endorsement only pertains to reimbursement for expenses incurred by the named insured and not those expenses the insured is legally obligated to pay as damages, the revised endorsement deletes that paragraph.

New Worldwide Coverage Endorsements

In response to insurer requests, several optional endorsements are being introduced to provide worldwide coverage for use with the Products/Completed Operations Coverage Part (occurrence and claims-made forms) and the Electronic Data Liability Coverage Part, similar to those already available for use with the CGL. As a reminder, the CGL forms in use are:

CG 24 22 Amendment of Coverage Territory – provides coverage anywhere in the world.

CG 24 23 Amendment of Coverage Territory – Additional Scheduled Countries – provides coverage in the United States of America (including its territories and possessions), Puerto Rico, Canada, and any other country specified in the Schedule.

CG 24 24 Amendment of Coverage Territory – Worldwide Coverage With Specified Exceptions – provides worldwide coverage for other than specified countries listed in the Schedule.

A condition, Expanded Coverage Territory, is added to the new endorsements to address suits brought outside the United States. The condition states in effect that if a suit is brought in a jurisdiction outside the standard coverage form territory and the insurer is prevented from defending the insured, the insurer will reimburse the insured for any reasonable and necessary expenses incurred for defending the suit, or for paying damages on behalf of the insured. The condition also states that all coverage disputes must be filed in U.S. courts and all payments will be in U.S. currency, at the prevailing rate of exchange.

New endorsements:

The following new forms are for use with the Products/Completed Operations Liability Coverage Form CG 00 37 (Occurrence form):

CG 34 12 Amendment of Coverage Territory – Worldwide Coverage

CG 34 13 Amendment of Coverage Territory – Additional Scheduled Countries

CG 34 14 Amendment of Coverage Territory – Worldwide Coverage With Specified Exceptions

The following forms are for use with the Products/Completed Operations Coverage Form CG 00 38 (Claims-Made form):

CG 34 42 Amendment of Coverage Territory – Worldwide Coverage

CG 34 43 Amendment of Coverage Territory – Additional Scheduled Countries

CG 34 44 Amendment of Coverage Territory – Worldwide Coverage With Specified Exceptions

The following forms are available for use with the Electronic Data Liability Coverage Part:

CG 34 40 Amendment of Coverage Territory – Worldwide Coverage

CG 34 41 Amendment of Coverage Territory – Worldwide Coverage With Specified Exceptions

With the exception of forms CG 34 13 and CG 34 43, coverage is excluded for any countries subject to trade or other economic sanction or embargo with the U.S., which would prohibit the distribution of the insurance contract.

New Products/Completed Operations Aggregate Limit of Insurance Endorsements

The following new endorsements, similar to CG 25 03 and CG 25 04, will apply the Products-Completed Operations Aggregate Limit separately to designated locations or projects:

CG 25 45 Designated Project(s) Products-Completed Operations Aggregate Limit

CG 25 46 Designated Location(s) Products-Completed Operations Aggregate Limit

CG 25 47 Designated Project(s) Aggregate Limit (for use with the Products-Completed Operations Liability Coverage Part)

CG 25 48 Designated Location(s) Aggregate Limit (for use with the Products-Completed Operations Liability Coverage Part)

Analysis:

The CGL currently has two optional endorsements that replace the General Aggregate Limit with either a Designated Construction Project(s) Aggregate Limit (CG 25 03), or a Designated Location(s) Aggregate Limit (CG 25 04).

Endorsement CG 25 03 allows the General Aggregate to apply to each designated construction project described in the Schedule of the endorsement; and CG 25 04 allows the General Aggregate to apply to each designated location described in the endorsement Schedule. Neither endorsement changes the amount of the General Aggregate shown on the policy.

The new endorsements are similar to CG 25 03 and CG 25 04 but will apply the Products-Completed Operations Aggregate Limit separately to designated locations or projects. These endorsements are designed for risks where the insured's business has multiple locations or projects. Often, a contract or franchise agreement will require that the insured obtain separate Products-Completed Operations Aggregate Limits for each location or project. This endorsement accomplishes that purpose.

Examples of when a Products-Completed Operations Aggregate Limit may be useful:

  • Restaurants and other risks where the insured's products are put to their intended use while on the insured's premises. Restaurant classes and Ice Cream Stores already have an available endorsement CG 24 07. CG 24 07 amends the products-completed definition to remove the "occurring away from premises you own or rent" limitation, thereby providing coverage within the products-completed operations hazard for example while patrons are consuming the named insured's product on premises owned or rented by the named insured and scheduled on the endorsement. These claims would be subject to the Products-Completed Operations Aggregate Limit. However, if CG 24 07 is not attached, the claims would not be subject to that limit but would instead be subject to the General Aggregate Limit. So by attaching a Designated Location(s) Products-Completed Operations Aggregate Limit endorsement, this would apply the Products-Completed Operations Aggregate Limit separately to products/completed operations hazard claims that may be attributable to the insured's location wherever the service was provided or the product was sold.
  • Other risks where the named insured is providing services or selling products on or from their own locations, and claims subject to products-completed operations hazards may be attributable to where the service is provided or the product is sold. Examples of such are beauty salons or spas, retail stores such as appliances, home improvement, supermarkets, and repair shops.
  • Risks where the named insured performs work away from their own premises, and claims arising out of the products/completed operations hazard may be attributable to the insured's job site. For example, construction contractors, installation or servicing of machinery or equipment, and building or facility repair or maintenance services.

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