OWNERS AND CONTRACTORS PROTECTIVE LIABILITY COVERAGE FORM RATING CONSIDERATIONS

(November 2022)

CLASSIFICATIONS

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.

CLASSES TO BE USED WITH THE CG 00 09

Code 16291: Construction Operations–Contractor (not Railroads)–Excluding Operations on Board Ships

This classification is used for construction projects where one contractor, usually the general contractor, is the named insured and another is the designated contractor. It is not to be used with railroad operation or any project that takes place on ships.

Code 91181: Construction Operations–Federal, State, or Local Housing Authorities

This classification is only to be used when the named insured is a federal, state, or local housing authority and then only for the construction of housing projects. The party that purchases CG 00 09 must be the designated contractor. A further restriction is that it cannot be used for veterans' emergency housing projects.

Code 16292: Construction Operations–Owner (not Railroads)–Excluding Operations on Board Ships

This is a Not Otherwise Classified (NOC) classification which means that it is considered only if one of the other classifications does not apply. It is to be used when an owner or lessee requires that the contractor provide protective liability insurance coverage for its benefit. The eligible operations are the maintaining and repairing of the named insured’s owned or rented premises. Structural alteration of the premises is an acceptable operation but only if the size of the building is unchanged and the building is not moved.

Code 17982: Operations

This is a Not Otherwise Classified (NOC) classification which means that it is considered only when no other classification applies. It is to be used when an owner or lessee requires that the contractor provide protective liability insurance coverage for its benefit. The eligible operations are the maintaining and repairing of the named insured’s owned or rented premises. Structural alterations of the premises is an acceptable operation but only if the size of the building is unchanged and the building is not moved.

Illustrations of risks contemplated in this classification are:

Non-construction operations performed by independent contractors such as such as freight handling and hauling
The installing, removing, servicing of, and demonstrating of goods or products by independent contractors
Demolition of structures that are not buildings. Owners, contractors, or municipalities are eligible.
On ship operations including the loading or unloading of ships. Ship owners or operators are eligible.
On ship operations by contractors’ work including shipwright work.

Code 93161: Permits–Building Demolition Operations–Municipalities

This classification is not for work being performed for municipalities but is for permits that a municipality requires in order for other entities to perform demolition work.

Note: If the municipality was having the demolition work done on its behalf it would use class code 16292.

Code 93163: Permits–Construction Operations–Municipalities

This classification is not for work being performed for municipalities but is for permits that a municipality requires in order for other entities to perform construction operations.

Note: If the municipality was having the construction done on its behalf it would use class code 16292.

CLASSES TO BE USED WHEN PRINCIPALS PROTECTIVE LIABILITY COVERAGE IS ENDORSED TO THE CG 00 09

The CG 00 09 is changed when the CG 28 07 is endorsed to it. The major change is that the named insured, not the designated contractor, is the purchaser of the policy. A designated contractor can still be listed on the declarations, along with the location and description of the designated project.

There are four classifications that are available when the CG 28 07 is attached.

Code 27111: Principals Protective Liability–Newspaper Publishers–Liability to Independent Contractors–(Coverage A)

This classification is used with operations that are involved with newspaper distribution. The key is that the independent contractors receive their remuneration based on the difference between its purchase price of the newspaper and its selling price. Coverage A provides liability coverage when an independent contractor is injured. This class cannot be used in operations of transportation agents, distributors, servicing dealers, news agents, or news dealers unless their operations are as defined in the first sentence above.

Code 27112: Principals Protective Liability-Newspaper Publishers–Liability for Independent Contractors–(Coverage B)

This classification is used with operations that are involved with newspaper distribution. The key is that the independent contractors receive their remunerations based on the difference between its purchase price of the newspaper and its selling price. Coverage B provides liability for bodily injury caused by an independent contractor.

This class cannot be used in operations of transportation agents, distributors, servicing dealers, news agents, or news dealers unless their operations are as defined in the first sentence above.

Code 15191: Principals Protective Liability–Liability to Independent Contractors–(Coverage A)

This is a Not Otherwise Classified (NOC) classification. Coverage A provides liability coverage when an independent contractor is injured.

Code 15192: Principals Protective Liability–Liability for Independent Contractors–(Coverage B)

This is a Not Otherwise Classified (NOC) classification. Coverage B provides liability for bodily injury caused by an independent contractor.

CLASS TO BE USED WHEN CONSTRUCTION PROJECT MANAGEMENT PROTECTIVE LIABILITY COVERAGE IS ENDORSED TO THE CG 00 09

The CG 00 09 is changed when the CG 31 15 is endorsed to it. The major change is that the named insured, not the designated contractor, is the purchaser of the policy. A designated contractor can still be listed on the declarations, along with the location and description of the designated project. CG 31 15–Construction Project Management Protective Liability Coverage is used to provide this coverage.

Code 93040: Construction Project Management Protective Liability

This is the only code available when this coverage is provided.

PREMIUM BASES

The premium basis for all the above classifications except codes 27111 and 27112 is the total cost of all work let or sublet in conjunction with a specific project. The cost of all labor, materials, and equipment furnished, used, or delivered to be used to complete the work along with all fees, bonuses, and commissions made, paid, or due must all be included in the cost amount. The cost of finished equipment the contractor installed but did not furnish is not to be included if the contractor did not do any other work on or in conjunction with such equipment. The rates apply per $1,000 of total contract cost.

The premium base for codes 27111 and 27112 is per news carrier.

RATING FORMULA

Multiply the loss cost for the specific code by the insurance company's loss cost multiplier to determine the rate. Then multiply the premium basis by the rate to determine the final premium. Published loss costs are available for only codes 16291, 16292, 27111, and 27112. All other must be referred to the insurance carrier providing the coverage.

EXPERIENCE AND/OR SCHEDULE RATING PLANS

The ISO Commercial General Liability (CGL) Experience Rating Plan and the ISO CGL Schedule Rating Plan do not apply to rating for CG 00 09. There is no other similar ISO rating plan available for use with it. Special rating plans, programs, or deviations are at each insurance company’s discretion.