COMPARE: CG 00 01–COMMERCIAL GENERAL LIABILITY COVERAGE FORM 12 19 EDITION ENDORSEMENT CHANGES AND ADDITIONS TO 04 13 COVERAGES AND EXISTING ENDORSEMENTS

(April 2022)

INTRODUCTION

The Insurance Services Office (ISO) introduced 92 new endorsements and modified 42 endorsements with edition dates of 12 19. All of the endorsements are considered optional by ISO but may be considered mandatory for some insurance companies. The major changes the December 2019 edition makes compared to the 04 13 edition coverage forms and existing endorsements primarily involve the following:

Several additional insured endorsements changes and additions
Introduction of exclusions related to specific products, processes or concerns:

o Cannabis

o Electronic Smoking Devices

o Earth Movement

o Genetically Modified Organisms

o Athletes

Adding coverage restrictions to the professional liability exclusions
Adding Premium Audit Noncompliance Charge endorsement
Adapting wording from CG 00 01 and CG 00 02 specific endorsements to develop similar endorsements for other coverage forms.

CG 00 01 and CG 00 02–Commercial General Liability Coverage Forms Analysis

ISO Commercial General Liability Coverage Forms Available Endorsements and Their Uses

CHANGES IN THE ADDITIONAL INSURED ENDORSEMENTS

1. Almost all of the additional insured endorsements have been changed to remove the words “shown on the declarations” when referring to limits and to instead use the more generic phrase “applicable limits of insurance.” The wording results in the additional insured being subject to whatever limits are in the policy, including any restricting sublimits that may have been added by endorsement. While this is in keeping with the intent of providing coverage for an additional insured no broader than what is being provided to the insured, it makes it more difficult for an additional insured to know what limits are available to it. Receiving only the declarations page is therefore insufficient going forward.

2. The very popular CG 20 33–Additional Insured – Owner, Lessee or Contractors – Automatic Status When Required in Construction Agreement With You has been updated in two ways:

a. The title has been changed with the addition of the words “A Written” before Construction. This results in the title matching the actual wording of the endorsement.

b. The named insured’s ongoing operations being performed are now limited to only those described earlier in the endorsement. This links the construction contract and the operations in a way that they were not previously linked.

3. The 04 13 updates of a number of Additional Insured Endorsements eliminated the words “arising out of” and added wording limiting coverage to such injuries and damages that were caused by the named insured or those working on its behalf. This 12 19 update is making the same change to CG 20 11–Additional Insured – Managers or Lessors of Premises and CG 20 24–Owners of Other Interests From Whom Land has Been Leased.

4. New Automatic Additional Insured Status Endorsements

These automatic additional insured status endorsements are helpful in that the named insured is in compliance with written agreements. However, they can lead to complacency. In addition, it is important for all parties to remember that limits provided for additional insureds are limits that are not available for the named insured if the aggregate becomes exhausted. Umbrella and/excess policies must be similarly endorsed for the maximum protection.

The following endorsements are added that provide automated additional insured status.

· CG 20 44–Additional Insured – Vendors – Automatic Status When Required in 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

· 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, Lessee or Contractors – Automatic Status for Other Parties when Required in Written Construction Agreement (Completed Operations)

5. Automatic Insured Status for Newly Acquired or Formed Limited Liability Companies (LLCs)

The Who is An Insured section of the policies provides 90 days automatic named insured status for any organization the named insured newly acquires or formed except for partnerships, joint ventures and limited liability companies. The following endorsements change the exception to apply only to partnerships and joint ventures resulting in limited liability companies being automatically covered as named insured for up to 90 days:

· CG 24 54–Automatic Insured Status for Newly Acquired or Formed Limited Liability Companies (LLCs) – Use with CGL

· CG 34 35–Automatic Insured Status for Newly Acquired or Formed Limited Liability Companies (LLCs) – Use with Electronic Data Liability

· CG 34 36–Automatic Insured Status for Newly Acquired or Formed Limited Liability Companies (LLCs) – Use with Liquor Liability

· CG 34 37–Automatic Insured Status for Newly Acquired or Formed Limited Liability Companies (LLCs) – Use with Pollution Liability – Designated Sites

· CG 34 38–Automatic Insured Status for Newly Acquired or Formed Limited Liability Companies (LLCs) – Use with Pollution Liability Limited Coverage or Products/Completed Operations Liability

CHANGES IN THE DRUGGIST ENDORSEMENTS

Three endorsements are revised, and one is introduced.

· CG 22 36–Exclusion – Limited Products and Professional Services (Pharmacists) substitutes the term “druggist” for the term “pharmacist.” However, the most important change is that instead of eliminating all products coverage the endorsement now excludes only such products that are dispensed by a pharmacist. All other products continue to be covered.

· CG 22 69–Pharmacists substitutes the term “pharmacist” for the term “druggist.” The endorsement is much more explicit that coverage does not apply to expanded health care services such as prescribing, performing any type of tests (previously mentioned on blood tests) and administering any drugs except for vaccinations. Coverage for volunteer workers is eliminated.

· CG 22 97–Pharmacists – Broadened Coverage substitutes the term “pharmacist” for the term “druggist.” The coverage is limited by removing coverage for negligence in hiring, training, etc., of others when the loss is due to pharmaceutical health care services. Coverage for volunteer workers is eliminated.

· CG 23 02-Exclusion – Professional Services – Pharmacists is newly introduced and eliminates coverage for the rendering of health care services by a pharmacist. However, products coverage continues.

PREMIUM AUDIT NONCOMPLIANCE CHARGE

Two endorsements are introduced that penalize an insured that is being uncooperative during the audit process. The wording on the policy states that the named insured is required to cooperate. However, if the insured chooses not to cooperate the only potential problem is a refusal to pay a claim because the terms and conditions have not yet been met. When the CG 99 09 or CG 99 10–Premium Audit Noncompliance Charge Endorsement is attached, the insured is subject to a surcharge if information is lacking. This could become a very popular endorsement with some insurance carriers.

MISCELLANEOUS ENDORSEMENTS

The remaining changes are a mixture of exclusions related to emerging markets, cross suit liability, volunteer workers and expanding endorsement offerings that are part of the commercial general liability coverage forms to other liability coverage forms. Some of these changes could have significant impacts on a particular client so reviewing the Commercial General Liability Coverage Forms Available Endorsements and Their Uses article could be helpful because every endorsement is listed along with a brief explanation of the endorsement and any change made.