OWNERS AND CONTRACTORS PROTECTIVE LIABILITY COVERAGE FORM OVERVIEW

(November 2022)

INTRODUCTION

CG 00 09–Owners and Contractors Protective Liability Coverage Form–Coverage for Operations of Designated Contractor is unusual. The Insurance Services Office (ISO) developed it for one specific purpose. It covers the named insured's liability that arises out of operations performed on its behalf by independent contractors.

The named insured must own the property, be a tenant of the property, or be another contractor for whom the designated contractor performs operations. The liability coverage provided ends when the project is finished or operations are completed. Coverage is limited to the specific project and/or location.

The primary exposure is from vicarious liability. This is when one party is liable for another party’s negligent actions, even though the first party was not directly responsible for the injury. For example, a parent is sometimes vicariously liable for the harmful acts of a child and an employer is sometimes vicariously liable for the acts of an employee. In the OCP, it is when the named insured, either as a property owner, project owner, general contractor, or other contractor, is held liable for the acts of a hired contractor, sub-contractor, or independent contractor that works for the named insured or on its behalf. Of course, there can still be disputes regarding contractor relationships and responsibilities.
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Vicarious liability is usually the result of injury or damage an employee causes under a strict employer and employee relationship. However, under certain circumstances, the liability exposure for acts by non-employees, such as independent contractors, may also be attributed to the owner or general contractor. The circumstances usually involve three situations:

Work that is inherently dangerous
Projects that impose non-delegable duties on the project owner under federal, state, or local laws

The organization’s negligence because it hired incompetent contractors

The coverage is not limited to only the vicarious liability but also liability tied directly to the named insured because of its overall supervision of the contractor’s operation at the project.

ELIGIBILITY

Eligibility requires that the named insure either own the property, be a general contractor, or be another contractor that has independent contractors or sub-contractors that perform operations on its behalf. This coverage form is not written in conjunction with any other coverage form unless it has been changed by the addition of the CG 28 07–Principals Protective Liability Coverage.

POLICY MAKEUP

ISO Owners and Contractors Protective Liability Coverage consists of the following basic parts or forms: CG DS 02–Owners and Contractors Protective Liability Declarations

CG 00 09–Owners and Contractors Protective Liability Coverage Form–Coverage for Operations of Designated Contractor

Policy Cover Page or Jacket. Individual insurance companies design this form for their own purposes. It may include a table of contents or index to meet the requirements of some states.
IL 00 21–Nuclear Energy Liability Exclusion Endorsement (Broad Form)

Note: The IL DS 00, ISO Common Policy Declarations and IL 00 17–Common Policy Conditions are not attached to CG 00 09 because the OCP Declarations and Coverage Part contain all needed declarations information and conditions.

CG 00 09–OWNERS AND CONTRACTORS PROTECTIVE LIABILITY COVERAGE FORM

CG 00 09–Owners and Contractors Protective Liability Coverage Form includes the following sections:

Section I–Coverages: Bodily Injury and Property Damage Insuring Agreement, Exclusions, and Supplementary Payments
Section II–Who Is an Insured
Section III–Limits of Insurance
Section IV–Conditions. This section includes the conditions usually found in only IL 00 17–Common Policy Conditions.
Section V–Definitions

AVAILABLE ENDORSEMENTS

The coverage that CG 00 09 provides is relatively narrow and only a limited number of endorsements are available to use with it.

Note: ISO is introducing 10 new endorsements with a 12 19 edition date and changing three others. All are optional endorsements but some insurance carriers may make them mandatory. The brief descriptions provided may be helpful in determining their impact on your client. The CG 99 10–Premium Audit Noncompliance Charge could be a particular concern on this policy because the charge assessed could be significant.

UNDERWRITING

Underwriting always begins by identifying exposures. The challenge in underwriting the Insurance Services Office (ISO) CG 00 09–Owners and Contractors Protective Liability Coverage Form–Coverage for Operations of Designated Contractor is that there are two parties, the named insured and the contractor. While both parties must be scrutinized, the overall scope of underwriting is relatively limited. This is because CG 00 09 covers only bodily injury and property damage liability for the operations that the designated contractor performs at the designated location. In addition, there are no products or completed operations exposures to underwrite because coverage ends when the construction or work is put to its intended use.

RATING

The Insurance Services Office (ISO) CG 00 09–Owners and Contractors Protective Liability Coverage Form–Coverage for Operations of Designated Contractor covers claims for bodily injury or property damage that arise out of operations that the designated contractor performs for the named insured. Eleven separate classifications are available. Six are used with the unendorsed CG 00 09, four are used when CG 00 09 is modified to provide Principals Protective Liability Coverage, and one classification applies when CG 00 09 is modified to provide Construction Project Management Protective Liability Coverage.