2013 Changes in the Commercial General Liability Program

Transcription

1 2013 Changes in the Commercial General Liability Program By Ted A. Kinney, CIC CPCU ARM AU AAM AAI AINS CPIA CRIS ISO is revising various General Liability coverage forms and endorsements effective April 2013 to reflect the changing needs of insureds and insurers. As with all program changes, the revisions include broadening of coverage, narrowing of coverage and editorial changes that have no impact on coverage. Of course, it is the narrowing of coverage that always presents an E&O exposure. This article will discuss the many changes in the program and indicate the impact the change has on coverage. REVISION TO THE LIQUOR LIABILITY EXCLUSION The revision to the CGL liquor liability exclusion addresses several court cases dealing with the liquor liability exclusion: Penn-America Insurance v. Peccadillos Two bar patrons had visited several bars where both drank excessively. While at the insured s bar, they purchased and consumed additional alcohol, and after a physical altercation with another patron, they were asked to leave, even though neither of them was in a condition to drive. The patrons left the bar and caused an accident, which killed two adults and injured two minor children. The bar argued the allegations in the underlying action against them fell outside the CGL policy s liquor liability exclusion, emphasizing the injuries and damages were caused by reckless and/or negligent, grossly negligent, willful and/or wanton actions or inactions in continuing to serve alcohol to intoxicated patrons and rendering them incapable of safely operating a vehicle and by ejecting them from the premises rather than calling the police when they knew the patrons would attempt to drive. The

2 Pennsylvania court ruled that the allegations fell outside the liquor liability exclusion. They ruled that a duty to defend was triggered when an insured was alleged to have continued to serve intoxicated patrons and then ejected them in a dangerously inebriated condition. McGuire v. Curry A racetrack employer allowed an underage employee unsupervised and unrestricted access to alcoholic beverages. The employee worked at the racetrack as a runner to deliver alcohol and other supplies to the race track s concession stands and bars. They gave the employee the key to its alcohol storage facility and no one monitored his access to the alcohol. One day after work, the employee got intoxicated and then left the premises and caused an accident. After the accident, the employee admitted to drinking on the job. The plaintiff s suit against the racetrack alleged negligent hiring, retention and supervision of an underage employee. The South Dakota court concluded the racetrack had a duty to supervise the employee and that, without supervision, it was foreseeable the underage employee would consume alcohol. The court ruled the employer had a duty to supervise the underage employee. Essex Insurance v. Café Dupont The insurer sued the insured, a nightclub operator, seeking a declaration it had no duty to defend or indemnify the insured in a suit alleging that the insured failed to prevent a patron from becoming intoxicated and allowed the intoxicated patron to leave and not detaining him or arranging alternative transportation. The nightclub had a liquor liability policy which had lapsed before the accident and coverage was sought under the CGL. The CGL in question had a provision that excluded damages or injuries arising out of providing or failing to provide transportation, detaining or failing to detain any person, or any act assuming or not assuming responsibility for the well-being, supervision or care of any person allegedly under the influence of alcohol. The District of Columbia court stated the quoted provision applied to

3 injuries arising out of failure to detain anyone or the failure to provide transportation for any intoxicated person, not just those who became intoxicated at the night club. Simmons v. Homatas The Illinois court considered issues related to whether a business that allows its patrons to bring alcoholic beverages into the establishment is considered in the business of selling alcoholic beverages and whether the business can be liable for injuries that arise, not as a result of serving alcohol, but as a result of actions in connection with allowing patrons to consume alcohol brought onto the premises. In the suit against the operator of the BYO, the court concluded the plaintiff s common law claims were not preempted by the state s Dram Shop laws. The court also stated the business establishment was not in the business of selling liquor as the club did not provide alcohol, even though it provided glasses and ice to its patrons. The liquor liability exclusion is being revised to state the exclusion applies even if the claims allege negligence or wrongdoing in: The supervision, hiring, employment, training or monitoring of others; or Providing or failing to provide transportation with respect to any person that may be under the influence of alcohol. The exclusion is also revised to provide that a BYO establishment is not considered in the business of selling, serving or furnishing alcoholic beverages. The BYO revision is a broadening of coverage. The other revisions expand the exclusion and therefore narrow coverage. EDITORIAL CHANGES TO THE AIRCRAFT, AUTO OR WATERCRAFT EXCLUSION The current CGL exclusion has an exception for bodily injury or property damage arising out of the operation of machinery or equipment attached to or part of land vehicles that would

4 qualify as mobile equipment if they were not subject to compulsory or financial responsibility laws in the state where it is licensed or principally garaged. The reference to in the state is being deleted because the CGL is available in jurisdictions that are not states, such as the District of Columbia, Puerto Rico, Guam and the U.S. Virgin Islands. This change represents no impact on coverage. CHANGES TO THE ELECTRONIC DATA EXCLUSION The current Electronic Data Exclusion precludes coverage for damages arising out of the loss of, loss of use of, damage to, corruption of, inability to access, or inability to manipulate electronic data. ISO has received requests to add an exception for bodily injury arising out of the loss of, loss of use of, damage to, corruption of, inability to access, or inability to manipulated electronic data. The exception for bodily injury will now be part of the exclusion. This is a broadening of coverage. RECORDING AND DISTRIBUTION OF MATERIAL OR INFORMATION IN VIOLATION OF LAW EXCLUSIONS The mandatory CG Endorsement was introduced in 2008 to exclude Bodily Injury, Property Damage and Personal & Advertising Injury arising out of any action or omission that violates or is alleged to violate certain consumer protection statutes. The endorsement expanded the exclusion in the policy form. The endorsement wording will now be incorporated into the CGL form and therefore the endorsement is being withdrawn. There is no impact on coverage since the endorsement was mandatory.

5 MATERIAL PUBLISHED WITH KNOWLEDGE OF FALSITY AND MATERIAL PUBLISHED PRIOR TO THE POLICY PERIOD EXCLUSIONS In 2000, ISO updated the definition of Personal and Advertising Injury to reference publication in any manner to address internet and electronic publications and their impact on Personal and Advertising Injury offenses arising via or a web site. The two exclusions are being revised for consistency with the definition by adding the words in any manner. There is no impact on coverage. CONDITIONS OTHER INSURANCE The current condition states that coverage is excess over any primary insurance for which the named insured has been added as an additional insured by attachment of an endorsement. Some insurers provide additional insured status directly in their coverage form and not by endorsement. Therefore, the phrase by attachment of an endorsement is being deleted. Insurance provided to a named insured will be excess over any other primary insurance to which the named insured has been added as an additional insured, whether by endorsement or any other means. This change is a broadening of coverage. AUTO AND MOBILE EQUIPMENT DEFINITIONS This change is similar to the change made in the Aircraft, Auto, or Watercraft exclusion, which referred to in the state where it is license or garaged. Again, the reference to in the state is being deleted because the CGL is available in jurisdictions that are not states, such as the District of Columbia, Puerto Rico, Guam and the U.S. Virgin Islands. There is no impact on coverage.

6 REVISIONS TO CG (OCCURRENCE) AND CG (CLAIMS MADE) LIQUOR LIABILITY COVERAGE FORMS Section II Who is an Insured is being revised to include trusts as named insureds. Trustees are now automatically included with respect to their duties as trustees. This is a broadening of coverage. REVISION TO CG RAILROAD PROTECTIVE LIABILITY COVERAGE FORM The pollution exclusion is being revised to address, as an exception to the exclusion, bodily injury or property damage arising out of fuels or lubricants for equipment used at the job location. This change is to provide the same level of coverage as provided by CG Pollution Exclusion Amendment Endorsement. Due to the change in the form, the endorsement is being withdrawn. This is a broadening of coverage. REVISIONS TO CG POLLUTION LIABILITY COVERAGE FORM DESIGNATED SITES AND CG POLLUTION LIABILITY LIMITED COVERAGE FORM DESIGNATED SITES The Aircraft, Auto, Rolling Stock or Watercraft exclusion is being revised to address claims for negligence in the supervision, hiring, employment, training or monitoring of others when such claims involve injury or damage arising out of automobile use. In 2000, ISO revised the Aircraft, Auto or Watercraft exclusion of the CGL to address court decisions regarding claims for negligent supervision. In 2003, ISO revised the Aircraft, Auto or Watercraft exclusion and auto and mobile equipment definitions to exclude bodily injury and property damage arising out of motor vehicles subject to compulsory or financial responsibility laws. The exception to the exclusion was revised to maintain coverage for operation of some mobile equipment such as cherry pickers (i.e. operation of the equipment on the vehicle). This revision was incorporated into the CG 0040 Pollution Liability Limited Coverage form Designated Sites, but was not incorporated into the CG Pollution Liability Coverage Form Designated Sites.

7 The changes regarding negligent supervision are being incorporated into the Pollution Liability Coverage forms by adding a paragraph to the Aircraft, Auto, Rolling Stock or Watercraft exclusion. The changes regarding the operation of the equipment on the vehicle are being incorporated into the Aircraft, Auto, Rolling Stock or Watercraft exclusion. The first change is a clarification of coverage intent but could be a reduction of coverage in states where courts have ruled the Aircraft, Auto, Rolling Stock or Watercraft exclusion inapplicable to negligent supervision claims. The second revision emphasizes that a land vehicle which is subject to compulsory or financial responsibility laws will not be covered for over-the-road exposures on the Pollution Liability Coverage forms. This may be a reduction of coverage in states where courts have found mandatory coverage to exist under a pollution liability coverage form. REVISION TO CG ELECTRONIC DATA LIABILIY COVERAGE FORM In 2006, ISO revised the Personal and Advertising Injury exclusion for infringement of copyright, trademark or trade secret in the CGL coverage form to reinforce that the exclusion did not apply to Personal and Advertising Injury arising out of other intellectual property rights involving the use of another s advertising idea in the insured s advertisement. A similar revision was made to the same exclusion in the CG Electronic Data Liability Coverage form. The exclusion in the CG form is being revised to delete the 2006 revision since the exception has no application to the coverage provided by the Electronic Data Liability Coverage form, which provides against damages because of loss of electronic data caused by an electronic data incident. There is no impact on coverage. REVISION TO CG LIMITED PRODUCT WITHDRAWAL EXPENSE ENDORSEMENT This endorsement reimburses certain expenses incurred because of product withdrawal with respect to a recall or tampering. It does not provide liability coverage for the cost or expense of

8 defending any suit brought against the insured. This is covered by the CGL Coverage Part and the Products-Completed Operations Coverage Part. The endorsement provides that the insurer may pay all or part of any deductible amount to effect settlement of any claim or suit. The endorsement also refers to the Participation Percentage indicated in the declarations and also provides that the insured will bear the cost of its participation in the loss and will not obtain other insurance to cover the cost of participation. The phrase to effect settlement of any claim or suit is being deleted since the insuring agreement of the endorsement addresses coverage for product withdrawal expense, not claims or suits. The endorsement is also being revised to reinforce that the Participation Percentage is indicated in the endorsement s schedule, not the declarations. The reference to loss is being revised to explicitly refer to each product withdrawal. A minor editorial change is being made to remove the heading Limits of Insurance. There is no impact on coverage. REVISION TO CG ELECTRONIC DATA LIABILITY ENDORSEMENT The exclusion in the Electronic Data Liability Endorsement is being revised for consistency with the CGL coverage form. An exception is being introduced for liability for damages because of bodily injury arising out of the loss of, loss of use of, damage to, corruption of, inability to access or inability to manipulate electronic data. This is a broadening of coverage. INTRODUCTION OF CG PRIMARY AND NON-CONTRIBUTORY OTHER INSURANCE ENDORSEMENT This optional endorsement will reflect that coverage made available to an additional insured is provided on a primary and non-contributory basis. The CGL Other Insurance provision states that the CGL is excess other primary insurance to which the named insured has been added as an additional insured. Requests have been made from insurers and agents to introduce an endorsement to expressly state that the coverage provided to an additional insured is provided on

9 a primary and non-contributory basis since many construction contracts require such an endorsement. The endorsement revises the other insurance condition to indicate coverage is primary and non-contributory provided the additional insured is a named insured on other insurance applicable to them and a written contract or agreement has been entered into by the insured stating the insured s policy will be primary and non-contributory and will not seek contribution from any other insurance available to the additional insured. There is no impact on coverage. REVISIONS TO VARIOUS ADDITIONAL INSURED ENDORSEMENTS Various additional insured endorsements provide an additional insured with certain liability coverage, including coverage with respect to vicarious liability or contributory negligence. Many states have anti-indemnification laws that prohibit provisions in construction contracts which require a party to indemnify another party against liability for the other party s own negligence or fault (indemnification provisions). In addition, some states prohibit providing insurance as an additional insured for the party s own negligence. The new language will provide insurance to an additional insured only to the extent provided by law. It also clarifies that the coverage afforded to the additional insured will not be broader than that which the named insured is required to provide the AI by a contract or agreement. It also clarifies that if coverage provided to the AI is required by a contract or agreement, the most the insurer will pay is the lesser of the amount required by the contract or agreement or the policy limits. This provision also provides that the endorsement will not increase the policy limits shown in the declarations. Some additional insured endorsements that address professionals (e.g. Additional Insured Engineers, Architects, or Surveyors) will also include

10 revisions consistent with those applied to the Professional Services Exclusion Endorsements that will be described later. CG Additional Insured Owners, Lessees or Contractors Automatic Status When Required in Construction Agreements with You is being revised to include reference to the Products/Completed Operations Liability Coverage Part. The provisions of the additional insured endorsements indicating that coverage will be provided to the extent permitted by law and limiting the coverage to the lesser of the contract requirements or the policy limits could be seen as clarifications or reductions of coverage. REVISION TO CG ADDITIONAL INSURED USERS OF GOLFMOBILES ENDORSEMENT The current endorsement provides additional insured status to any person using or legally responsible for the use of golfmobiles loaned or rented to others by the named insured. The current endorsement does not limit additional insured status to persons using the golfmobile for the purpose of playing golf. The revision introduces a definition of golfmobile which states the golfmobile is designed.for the purpose of playing golf. This may be considered a reduction in coverage since coverage is potentially limited by the introduction of the definition. INTRODUCTION OF CG ADDITIONAL INSURED OWNERS, LESSEES OR CONTRACTORS AUTOMATIC STATUS FOR OTHER PARTIES WHEN REQUIRED IN WRITTEN CONSTRUCTION AGREEMENT The current CG endorsement amends the Who is an Insured provision to add as an additional insured any person or organization for whom the named insured is performing operations when the parties have agreed in writing in a contract or agreement that such person or organization will be added as an additional insured. Subcontractors (named insureds) often enter into contracts with general contractors wherein the named insured agrees to provide additional insured status to several other parties, usually upstream parties (e.g. the general contractor and

11 the project owner). Since the named insured may not be directly contracting with the project owner, the CG may not accommodate all such scenarios. The new CG endorsement provides additional insured status to those parties whom the named insured is obligated in writing in a contract or agreement to name as an additional insured under their policy. This is a broadening of coverage. REVISION TO CG AMENDMENT OF LIQUOR LIABILITY EXCLUSION (USED WITH CGL COVERAGE PART), CG AMENDMENT OF LIQUOR LIABILITY EXCLUSION EXCEPTION FOR SCHEDULED PREMISES OR ACTIVITIES (USED WITH CGL COVERAGE PART), CG AMENDMENT OF LIQUOR LIABILITY EXCLUSION (USED WITH PRODUCTS/COMPLETED OPERATIONS COVERAGE PART) AND CG AMENDMENT OF LIQUOR LIABILITY EXCLUSION - EXCEPTION FOR SCHEDULED PREMISES OR ACTIVITIES (USED WITH PRODUCTS/COMPLETED OPERATIONS COVERAGE PART) ENDORSEMENTS The current CG Amendment of Liquor Liability Exclusion Endorsement may be used to extend the liquor liability exclusion of the CGL to also apply to businesses which regularly serve alcoholic beverages, whether or not profit is derived (the CG is similar except it is used with the Products-Completed Operations Coverage Form). The CG and CG endorsements are similar; however they contain an exception to the liquor liability exclusion for specific activities, which can be listed in the endorsement schedule. As previously discussed, ISO has revised the liquor liability exclusion of the various CGL coverage forms to explicitly exclude coverage even if the claims allege negligence or wrongdoing in the supervision, hiring, employment, training or monitoring of others; or providing or failing to provide transportation with respect to any person that may be under the influence or alcohol. Also, for the purposes of the exclusion in the coverage form, permitting a person to bring alcoholic beverages for consumption on the insured s premises, whether or not a fee is charged or a license is required, is not by itself, considered in the business of selling, serving or furnishing alcoholic beverages

12 Change # 1 Endorsements CG 21 50, CG 21 51, CG and CG are being revised to indicate the exclusion will apply if one of the reasons for which any insured may be held liable for bodily injury or property damage is causing or contributing to the intoxication of any person, which includes causing or contributing to the intoxication of any person because alcoholic beverages were permitted to be brought on your premises, for consumption on your premises. The result is a reduction in coverage. Change # 2 For consistency with revisions made to the Liquor Liability exclusion in the various CGL coverage forms, ISO is revising the exclusions found in the CG and CG and CG and CG endorsements to explicitly state that the exclusions apply even if the claims against any insured allege negligence or wrongdoing in the supervision, hiring, employment, training or monitoring of others; or providing or failing to provide transportation with respect to any person that may be under the influence or alcohol. This is a clarification of coverage, but may be a reduction in states where courts have ruled the exclusion is not applicable for liquorrelated claims alleging negligent supervision or failure to detain an intoxicated person or failure to provide transportation. Change # 3 CG and CG and CG and CG endorsements are being revised to indicate the exclusion will apply if the insured permits any person to bring alcoholic beverages on the named insured s premises, for consumption on the named insured s premises. The result is a reduction in coverage.

13 INTRODUCTION OF CG TOTAL POLLUTION EXCLUSION FOR DESIGNATED PRODUCTS OR WORK ENDORSEMENT The current optional endorsement CG Total Pollution Exclusion for use with the Products- Completed Operations Coverage Part provides an exclusion with respect to bodily injury or property damage arising out of pollution exposures. The new optional endorsement is similar to the CG except it limits the applicability of the exclusion to the specific product or work described in the endorsement schedule. This is a broadening of coverage if the new endorsement replaces endorsement CG This is a reduction of coverage if the new endorsement is attached to a policy that does not currently contain the CG VARIOUS PROFESSIONAL SERVICES EXCLUSION ENDORSEMENTS REVISED In Liberty Life Insurance Co. v. Travelers Indemnity of Illinois, the court considered whether a negligent supervision claim was covered even though the act of the person being supervised was excluded. The suit sought damages from Liberty Life based upon its alleged negligence in the hiring, supervising and retaining of an employee. The court held that the exclusions in the insurer s policy did not apply to Liberty Life in its oversight role as the agent s principal. To reinforce the Professional Services exclusion in various CGL endorsements, the exclusion is being enhanced to address claims alleging negligence or other wrongdoing in hiring, employment, training, supervision or monitoring of others by any insured. This is a reinforcement of coverage intent but may result in a reduction of coverage in states where courts have ruled professional services exclusions are not applicable to negligent supervision claims and other similar types of claims. CG Exclusion Professional Services Blood Banks is revised to make minor changes to provide consistency with PR Blood Banks Professional Liability Coverage Form.

14 REVISIONS TO CG EXCLUSION FAILURE TO SUPPLY ENDORSEMENT In the 2010 rules filing, ISO introduced several classifications, including classifications to address Biofuels Distributor Risks. The classifications instruct that CG Exclusion Failure to Supply Endorsement should be attached to policies issued to Biofuels Distributor Risks. CG excludes coverage with respect to bodily injury and property damage arising out of the failure of any insured to adequately supply gas, oil, water, electricity or steam. The CG endorsement is being revised to state that the exclusion also applies to the failure of any insured to adequately provide biofuel. When this new endorsement is attached, the exclusion will be further expanded and thus represents a narrowing of coverage. TITLES REVISED CG PESTICIDE OR HERBICIDE APPLICATOR COVERAGE, CG PESTICIDE OR HERBICIDE APPLICATOR COVERAGE AND CG LAWN CARE SERVICES COVERAGE ENDORSEMENTS All titles are being revised to include the words Limited Pollution coverage (e.g. CG Pesticide or Herbicide Applicator - Limited Pollution Coverage). There is no impact on coverage. REVISION TO CG DRUGGISTS ENDORSEMENT Currently, the CG Druggists Endorsement provides coverage with respect to bodily injury or property damage arising out of the professional health care services of a pharmacist. However, the endorsement excludes bodily injury or property damage arising out of certain specified services performed by any insured, including administering vaccinations. The endorsement is being revised to include an exception to the exclusion with respect to the administering of vaccinations in accordance with any applicable state or federal law. This is a broadening of coverage.

15 REVISION TO CG REAL ESTATE PROPERTY MANAGED ENDORSEMENT The CG endorsement provides that, with respect to liability arising out of the named insured s management of property for which the named insured is a real estate manager, the insurance provided is excess over any other valid and collectible insurance. The endorsement is being revised to reinforce that the insurance provided is excess over any other insurance available, whether such insurance is primary or excess. There is no impact on coverage. REVISIONS TO CG COLLEGES OR SCHOOLS (LIMITED FORM) AND CG COLLEGES OR SCHOOLS ENDORSEMENTS Both endorsements amend the Aircraft, Auto and Watercraft exclusion with respect to the transportation of students. Both exclude bodily injury or property damage arising out of the ownership, maintenance, operation, use, loading or unloading or entrustment to others of any aircraft, auto or watercraft that is owned, operated or hired by an insured. Editorial changes are being made to both endorsements to make the second paragraph of the exclusion consistent with the first paragraph of the exclusion and with the wording of the exclusion in the CGL Coverage Form. There is no impact on coverage. INTRODUCTION OF CG LIQUOR LIABILITY BRING YOUR OWN ALCOHOL ESTABLISHMENT ENDORSEMENT Currently, the insuring agreement of the Liquor Liability Coverage form provides liability coverage to the insured who is legally obligated to pay damages because of injury if liability for such injury is imposed on the insured by reason of the selling, serving or furnishing of any alcoholic beverage. As previously discussed, the CG and CG exclusion endorsements were revised to indicate that the exclusion in the CGL will apply if an insured permits any person to bring alcoholic beverages for consumption on the insured s premises, whether or not a fee is charged for such activity or a license is required. To complement the

16 revised CG and CG endorsements, the CG endorsement is being introduced to amend the Liquor Liability Coverage form insuring agreement to extend liquor liability coverage to insureds who permit any person to bring alcoholic beverages for consumption on the insured s premises, whether or not a fee is charged for such activity or a license is required. This change may be considered a broadening of coverage in that it contains an express grant of coverage with respect to allowing any person to bring alcoholic beverages on an insured s premises, for consumption on the insured s premises. INTRODUCTION OF CG AMENDMENT OF PERSONAL AND ADVERTING INJURY DEFINITION ENDORSEMENT The current definition of Personal and Advertising Injury in the CGL Coverage Form means, in part, injury, including consequential bodily injury, arising out of several enumerated offenses, including oral or written publication, in any manner, of material that violates a person s right of privacy. The new endorsement is being introduced to delete oral or written publication, in any manner, of material that violates a person s right of privacy from the definition, but only with respect to use of the term as it applies under Coverage B Personal and Advertising Injury Liability. The definition remains unchanged with respect to the Personal and Advertising Injury exclusion under Coverage Bodily Injury and Property Damage. The attachment of the endorsement represents a reduction in coverage. REVISION TO CG WAIVER OF GOVERNMENTAL IMMUNITY ENDORSEMENT The CG endorsement, used with the CGL Coverage Part, provides an option with respect to an insured who is entitled to governmental immunity, but who may want to waive such immunity as a defense for any action against the insured. The endorsement is being revised so

17 that it now applies to the Owners & Contractors Protective Liability Coverage Part and the Railroad Protective Liability Coverage Part. There is no impact on coverage. REVISION OF CG AMENDMENT OF COVERAGE TERRITORY WORLDWIDE COVERAGE, CG AMENDMENT OF COVERAGE TERRITORY ADDITIONAL SCHEDULED COUNTRIES AND CG AMENDMENT OF COVERAGE TERRITORY WORLDWIDE COVERAGE WITH SPECIFIED EXCEPTIONS ENDORSEMENTS In 2006, ISO revised the alpha numeric paragraph designators of the Other Insurance Condition in the CGL coverage forms. The Amendment of Coverage Territory endorsements are being revised for consistency with the Other Insurance Condition in the CGL coverage forms. There is no impact on coverage. REVISION TO CG AMENDMENT OF INSURED CONTRACT DEFINITION AND CG LIMITED CONTRACTUAL LIABILITY RAILROADS ENDORSEMENTS Currently, the CG Amendment of Insured Contract Definition and CG Limited Contractual Liability Railroads may be used to redefine the term insured contract. Paragraph f. of the definition addresses liability assumed by the named insured with respect to tort liability of another party. The liability is limited to bodily injury or property damage caused in whole or in part by the named insured or those acting on behalf of the named insured. Several states have anti-indemnification statutes that prohibit provisions in construction contracts which require a party to indemnify another party against liability for such other party s own negligence or fault. In response to the statutes, paragraph f. of the insured contract definition is revised to state, However, such part of a contract or agreement shall only be considered an insured contract to the extent your assumption of tort liability is permitted by law. The CG is also revised to apply to the Products/Completed Operations Coverage Part in addition to the CGL Coverage Part. When attached to a policy, an insured will not be provided coverage for

18 the tort liability such insured assumes of another party to the extent the assumption is prohibited in a particular jurisdiction. INTRODUCTION OF CG DESIGNATED LOCATION(S) AGGREGATE LIMIT ENDORSEMENT Currently, optional endorsement CG Designated Location(s) General Aggregate makes a separate General Aggregate available for operations at specifically scheduled locations. The endorsement indicates that the general aggregate limit applies with respect to losses that can be attributed only to operations at the designated location. Losses that cannot be attributed to a single location are subject to the policy General Aggregate or Products/Completed Operations Aggregate. The new CG endorsement is to be used with the Liquor Liability Coverage form. The endorsement makes the designated location aggregate applicable to the selling, serving or furnishing of alcoholic beverages from a single location. Losses that cannot be attributed to a single location will be subject to the policy aggregate limit. This is a new form. VARIOUS COVERAGE FORMS AND ENDORSEMENTS EDITORIALLY REVISED ISO is editorially revising various coverage forms and endorsements. There is no impact on coverage. CONCLUSION The ISO filing includes changes to forms and endorsements to reflect the changing needs of insureds and insurers. The effective date of the changes is April Agents should check with their companies to see if the changes will be adopted. Remember, the revisions include broadening of coverage, narrowing of coverage and editorial changes that have no impact on coverage. Any narrowing of coverage always presents an E&O exposure.