CG DS 02–OWNERS AND CONTRACTORS PROTECTIVE LIABILITY DECLARATIONS

(November 2022)

INTRODUCTION

The Insurance Services Office (ISO) provides a sample declarations for insurance companies to consider as they design their own declarations. It includes descriptive, inclusive language that clearly identifies the risk, plus coverage information that relates to specific sections of the coverage form. It also has rating and premium information on the exact nature of the charges made at inception as well as those that could be made should a premium audit occur. This brief analysis addresses the CG DS 02–Owners and Contractors Protective Liability Declarations.

DESCRIPTION

This section includes the following information:

• Policy number

• Insurance company name
• Producer name
• Named insured

Note: The order in which multiple named insureds are listed matters. The first named insured has unique duties, so must be treated differently than any other insured named. That party pays the premium and also receives any return premiums. It is the only named insured that receives notices of cancellation and other policy-related correspondence. If a first named insured is deleted from the policy, the second named insured automatically assumes first named insured status.

• Mailing address
• Policy period expressed as month, day, and year beginning at 12:01 a.m. at the policy’s mailing address
• Location of job project or covered operations
• Designated contractor name and mailing address

INSURING AGREEMENT

The insurance company agrees to provide the insurance in this coverage form, subject to all its terms and conditions and the premium being paid.

LIMITS OF INSURANCE

This section contains the following information:

• Each occurrence limit
• Aggregate limit

Note: The each occurrence limit is the highest amount that may be paid in any one occurrence or event, regardless the number of entities that bring suits or make claims due to that occurrence.

Example: Premier Roofing purchases a CG 00 09–Owners and Contractors Protective Liability Coverage Form with a $1,000,000 each occurrence limit naming Ollie as the insured. Ollie hired Premier to replace a roof. While Premier’s employees are working on the roof, a section breaks off, injuring a crowd of pedestrians who were awaiting a traffic light. Thirteen individuals file claims for a total of $5,000,000 in damages. The limit for all claims that arise from one occurrence is $1,000,000, regardless of the number of claims or their value. This policy will protect Ollie for only up to $1,000,000.

The aggregate limit is the most paid for the total of all bodily injury and property damage sustained during the policy period.

Example: The CG 00 09 Premier provided for Ollie has a $2,000,000 aggregate limit. Premier’s actions result in Ollie being sued four additional times during the policy period for a total of $4,000,000. The loss payment is capped at the $2,000,000 aggregate limit.

DESCRIPTION OF BUSINESS

The form of business identifies the type of entity that applies to the named insured. The type of entity is referred to in Section II–Who Is an Insured of the coverage to determine who is an insured. The listed forms of business are:

• Individual
• Partnership
• Joint Venture
• Limited Liability Company
• Organization other than the above. This includes corporations.

Note: If there is more than one named insured, there may be more than one form of business.

CLASSIFICATION AND PREMIUM

This section includes the following information:

• Classification
• Code number
• Premium base
• Rate per $1,000 of contract cost
• Advance (deposit) premium
• State tax or other charges that apply
• Total premium subject to audit, if applicable
• Premium payment terms if the policy period is more than one year and premium is paid in annual installments
• Audit period/frequency, if applicable

ENDORSEMENTS

This section has spaces for endorsement numbers that apply and are included when the policy is issued.

STATEMENT OF COVERAGE

This section states that this declarations, CG 00 09 and any endorsements attached to the form constitutes a complete policy.

Note: This declarations also states that the Common Conditions must be attached. However, the IL 00 17–Common Conditions is NOT to be attached because those conditions have already been incorporated into this policy.

SIGNATURES

This section has spaces for the countersigning agent's name and the date the policy was countersigned. The facsimile signatures of the insurance company officers may also be entered in this area if they are not entered elsewhere.