ISO Form Changes Commercial General Liability

Transcription

1 ISO Form Changes Commercial General Liability Tuesday March 19, 2013 There are new multistate endorsements that are being introduced: Primary And noncontributory - Other Insurance Condition Endorsement Summary: In this article, we will highlight changes that have any significant impact and new endorsements to the form series. It goes without saying that any form that narrows coverage requires that we notify our insureds to avoid any gap in coverage as they renew on the new CGL edition date. By Laurie Infantino Additional Insured - Owners, Lessees or Contractors - Automatic Status for Other Parties When Required in Written Construction Agreement Total Pollution Exclusion For Designated Products Or Work Endorsement Liquor Liability - Bring Your Own Alcohol Establishments Endorsement Amendment of Personal and Advertising Injury Definition Endorsement Designated Location(s) Aggregate Limit Endorsement In April of 2013 the ISO modified the Commercial Property Forms. It was one of the biggest changes in forms that we have seen in years with the majority of forms taking on some type of change. Effective April 2013, many of the Commercial General Liability forms also have a new edition date. Some of the changes are minor but carry new edition dates of existing form numbers, and there are some forms that are first being introduced. It is a multistate revision and some of the specific state forms have also taken a change or introduced new forms. Some of the ISO changes have already been adopted in insurance company forms while other changes represent clarification of the "intent" of the form. Specifically we will highlight those changes that have any significant impact and new endorsements to the form series. It goes without saying that any form that narrows coverage requires that we notify our insureds to avoid any gap in coverage as they renew on the new CGL edition date. All of these changes will be discussed in more detail in the Insurance Community class on March 19th. Liquor Liability Form Revisions One of the areas that has taken on a significant change is in the area of Liquor Liability. There are several forms that have taken the new edition date including:

2 Liquor Liability Coverage Form CG Liquor Liability Coverage Form CG Amendment Of Liquor Liability Exclusion CG that gives rise to the need for clarification and form revision. Some of the specific court cases relating to this change are: PENN-AMERICA INS.CO. v. PECADILLOS, INC. (27A.3d259 (2011) Superior Court of Pennsylvania; McGuire v. Curry and Park Jefferson Speedway, Inc., a South Dakota Corporation (766 N. W. 2d 501 (2009); SIMMONS V. HOMATAS (925 n. e. 2D 1089 (2010; 236 ill. 2D 459) Supreme Court of Illinois., to name a few. Amendment Of Liquor Liability Exclusion - Exception For Scheduled Premises Or Activities CG Liquor Liability - Bring Your Own Alcohol Establishments CG NEW Amendment Of Liquor Liability Exclusion CG Amendment Of Liquor Liability Exclusion - Exception For Scheduled Premises Or Activities CG As with most liability changes there is case law In the case of PENN-AMERICA INS.CO. v. PECADILLOS, INC. (27A.3d259 (2011) Superior Court of Pennsylvania, two customers entered the bar after visiting several other drinking establishment where they drank in excess. They continued to drink at Pecadillos, became further intoxicated, and were asked to leave even though they were in no condition to drive. The patrons left, caused an accident, killed two individuals and injured two others. The insured argued that the allegations in the underlying action against them fell outside the related CGL policy's liquor liability exclusion. The court 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. In the case of McGuire v. Curry and Park Jefferson Speedway, Inc., a South Dakota Corporation (766 N. W. 2d 501 (2009), a racetrack employer allowed an unsupervised, underage employee access to alcoholic beverages. The employee was a runner hired to deliver alcohol and other supplies to the racetrack's concession stands and bars. One day after the employee's shift ended, he drove his vehicle off the racetrack's premises while intoxicated and injured a passenger on a motorcycle. The plaintiff's suit filed against the

3 racetrack alleged negligent hiring, retention and supervision of an underage employee. The court concluded that the racetrack did have a duty to supervise the employee and to disallow access to alcoholic beverages. In the last case, SIMMONS V. HOMATAS (et al On Stage Productions, Inc.,) (925 n. e. 2D 1089 (2010; 236 ill. 2D 459) Supreme Court of Illinois, the Illinois court had to rule on whether a business that does not serve alcoholic beverages but allows patrons to bring in alcohol is considered in the business of selling alcoholic beverages. In this case the club, operated by Stage Productions, is a nude strip club that does not serve alcohol but allows its patrons to bring their own alcohol and sells them set ups - providing glasses, mixers, ice, etc. Homatas and his companion brought in a fifth of rum and vodka and became intoxicated. They left the club and retrieved their car from valet parking. The valet parker opened the driver's door and told Homatas to leave the premises. Fifteen minutes later, Homatas collided with another vehicle, resulting in the death of four individuals. The case had to deal with 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 that they brought on the premises. The court concluded that the plaintiff's common law claims were not preempted by the state's Dram Shop laws. The court went on to state that the business was not in the business of selling liquor even though they provided the set ups for the liquor that was brought in by the patrons. Due to these cases and others, the ISO has revised the Liquor Liability exclusion in the various GL coverage forms to clearly state that the Liquor Liability exclusion applies even if the claims against any insured allege the negligence or other wrongdoing in: or monitoring of others; or, Providing or failing to provide transportation with respect to any person that may be under the influence of alcohol; if the "occurrence" which caused the "bodily injury" or "property damage" involved that which is described in Paragraph (1), (2) or (3) of the exclusion. There is further clarity that a Bring Your Own Alcohol Establishment (BYO) is not considered in the business of selling, serving or furnishing alcoholic beverages. There is a new endorsement available in the series that specifically deals with the BYO exposure titled: Liquor Liability Bring Your Own Alcohol Establishment. Pollution Form Revisions There are a couple of forms relating to Pollution that have been modified with the 4/13 change including: Pollution Liability Coverage Form Designated Sites Cg Pollution Liability Limited Coverage Form Designated Sites Cg Total Pollution Exclusion For Designated Products Or Work Cg The supervision, hiring, employment, training

4 Pesticide Or Herbicide Applicator - Limited Pollution Coverage Cg In the Pollution Liability Coverage Forms CG and CG the "Aircraft, Auto, Rolling Stock or Watercraft" exclusion is revised to clarify coverage as relates claims for negligence in the "supervision, hiring, employment, training or monitoring of others" when the claim involves injury or damage arising out of the use of an automobile. This exclusion has been reviewed in prior form series including in 2000 and There is a new exclusionary endorsement introduced titled: Total Pollution Exclusion for Designated Products or Work CG This new endorsement is similar to the CG except that it limits the applicability of the exclusion to the specific product or work described in the schedule on the endorsement. Caution when reviewing the endorsement - it is broadening if the CG replaces the CG However, addition of the endorsement to a policy that does not contain the CG would result in a reduction in coverage. Additional Insured Endorsements There are approximately 24 Additional Insured Endorsements that have taken the new edition date. These changes are due, in part, to the various state laws that have "anti-indemnification" laws that prohibit provisions in construction contracts which require one party to indemnify another against liability for the other party's own negligence or fault. Also, there are some states that prohibit providing insurance to an additional insured for the party's own negligence. One of the clarifications in the new Additional Insured Endorsements is to add new language that will provide insurance to an additional insured "only to the extent provided by law." Further clarification is that the coverage provided under the Additional Insured Endorsement cannot be broader coverage than that provided to the named insured. There is a new Additional Insured endorsement introduced in this form series titled: Additional Insured-Owners, Lessees or Contractors - Automatic Status for Other Parties When Required in Written Construction Contract Agreement (CG 20 38). This endorsement provides additional insured status to parties to whom the named insured has become obligated due to written contract or agreement to name an additional insured under their policy. Primary and Non-Contributory - Other Insurance Endorsement CG New Form A new form has been introduced to clarify that coverage is made available to an additional insured on a "primary and non-contributory" basis. This change is particularly important for the construction client because construction contracts oftentimes require that the additional insured is provided coverage on a "primary and noncontributory" basis. The provisions require that: The additional insured is a named insured on other insurance available to them; and A written contract or agreement has been entered into by the insured stating that the insured's policy will be primary and wound not seek contribution from any other insurance available to the additional insured. There are several other forms that have taken a change in edition date that we will be discussing in our upcoming New Commercial General Liability Form class taught on March 19th. The class is being taught by Marjorie Segale, AFIS, CISC, CIC, RPLU, CRIS, ACSR, CISR. Marjorie is the Vice President and Director of Education for the Insurance Community Center and President of Segale

5 Consulting Services, LLC. This is a listing of the forms that have changed. If it form is marked in "red" it is a new form to the series. Products/Completed Operations Liability Coverage Form (Occurrence) CG Commercial General Liability Coverage Form (Occurrence) CG Products/Completed Operations Liability Coverage Form (Claims Made) CG Commercial General Liability Coverage Form (Claims Made) CG Pollution Liability Coverage Form Designated Sites CG Owners And Contractors Protective Liability Coverage Form Coverage For Operations Of Designated Contracto Pollution Liability Limited Coverage Form Designated Sites CG CG Liquor Liability Coverage Form (Occurrence) CG Underground Storage Tank Policy Designated Tanks CG Liquor Liability Coverage Form (Claims Made) Electronic Data Liability Coverage Form CG CG Product Withdrawal Coverage Form Railroad Protective Liability Coverage Form CG CG Limited Product Withdrawal Expense

6 Endorsement CG Electronic Data Liability Additional Insured Managers Or Lessors Of Premises CG CG Primary And Non-Contributory - Other Insurance Endorsement CG Additional Insured State Or Governmental Agency Or Subdivision Or Political Subdivision - Permits Or Authorizations CG Additional Insured Concessionaires Trading Under Your Name CG Additional Insured State Or Governmental Agency Or Subdivision Or Political Subdivision - Permits Or Authorizations Relating To Premises CG Additional Insured Controlling Interest CG Additional Insured Vendors CG Additional Insured Engineers Architects Or Surveyors CG Additional Insured Mortgagee, Assignee Or Receiver CG Additional Insured User Of Golfmobiles CG Additional Insured Executors, Administrators, Trustees Or Beneficiaries CG Additional Insured Owners, Lessees Or Contractors Scheduled Person Or Organization CG Additional Insured Owners Or Other Interests From Whom Labor Has Been Leased

7 CG Additional Insured Designated Person Or Organization CG Additional Insured Owners, Lessees Or Contractors - Automatic Status When Required In Construction Agreement With You CG Additional Insured Co-Owner Of Insured Premises CG Additional Insured Lessor Of Leased Equipment Automatic Status When Required In Lease Agreement With You CG Additional Insured Lessor Of Leased Equipment CG Additional Insured - Grantor Of Licenses - Automatic Status When Required By Licensor CG Additional Insured Grantor Of Franchise CG Additional Insured - Grantor Of Licenses CG Oil Or Gas Operations Non-Operating, Working Interests CG Additional Insured - Owners, Lessees Or Contractors - Completed Operations CG Additional Insured Engineers, Architects Or Surveyors CG Additional Insured Engineers, Architects Or Surveyors Not Engaged By The Named Insured CG Additional Insured - Owners, Lessees Or Contractors - Automatic Status For Other Parties When Required In Written Construction Agreement CG Exclusion - Designated Professional Services

8 CG Total Pollution Exclusion For Designated Products Or Work CG Amendment Of Liquor Liability Exclusion CG Amendment Of Liquor Liability Exclusion - Exception For Scheduled Premises Or Activities CG Exclusion - Financial Services CG Exclusion - Funeral Services Exclusion - Inspection, Appraisal And Survey Companies CG Exclusion - Professional Services - Blood Banks CG Exclusion - Testing Or Consulting Errors And Omissions CG CG Exclusion - Counseling Services CG Exclusion - Construction Management Errors And Omissions CG Exclusion - Professional Veterinarian Services CG Exclusion - Products And Professional Services (Druggists) CG Exclusion - Diagnostic Testing Laboratories CG Exclusion - Products And Professional Services (Optical And Hearing Aid Establishments) CG

9 Exclusion - Camps Or Campgrounds CG CG Real Estate Property Managed Exclusion - Engineers, Architects Or Surveyors Professional Liability CG Exclusion - Services Furnished By Health Care Providers CG CG Colleges Or Schools (Limited Form) CG Colleges Or Schools CG Exclusion - Specified Therapeutic Or Cosmetic Services CG Professional Liability Exclusion - Computer Software CG Exclusion - Insurance And Related Operations CG Exclusion - Failure To Supply CG Pesticide Or Herbicide Applicator - Limited Pollution Coverage CG Druggists Professional Liability Exclusion - Health Or Exercise Clubs Or Commercially Operated Health Or Exercise Facilities G Professional Liability Exclusion - Computer Data Processing Exclusion - Contractors - Professional Liability

10 Limited Exclusion - Contractors - Professional Liability Exclusion - Internet Service Providers And Internet Access Providers Errors And Omissions CG Exclusion - Adult Day Care Centers Professional Liability Exclusion - Web Site Designers CG Professional Liability Exclusion - Electronic Data Processing Services And Computer Consulting Or Programming Services Exclusion - Real Estate Agents Or Brokers Errors Or Omissions CG Professional Liability Exclusion - Spas Or Personal Enhancement Facilities CG Liquor Liability - Bring Your Own Alcohol Establishments CG Exclusion - Telecommunication Equipment Or Service Providers Errors And Omissions CG Amendment Of Personal And Advertising Injury Definition CG Lawn Care Services - Limited Pollution Coverage CG Waiver Of Governmental Immunity CG Limited Exclusion - Personal And Advertising Injury - Lawyers CG Amendment Of Coverage Territory - Worldwide Coverage CG

11 Amendment of Coverage Territory - Additional Scheduled Countries AMENDMENT OF LIQUOR LIABILITY EXCLUSION - EXCEPTION FOR SCHEDULED PREMISES OR ACTIVITIES CG CG Amendment Of Coverage Territory - Worldwide Coverage With Specified Exceptions CG Sign up for classes today. Either join the University for one low price for the entire agency for all classes and products... or enroll in individual classes. Click here and be ready to learn! Amendment Of Insured Contract Definition CG Limited Contractual Liability - Railroads CG Designated Location(S) Aggregate Limit Laurie Infantino Laurie Infantino is the president of Insight Insurance Consulting and Insurance Community Center. Insurance Community Center is an internet-based company providing interactive insurance webinars, professional products and a library of insurance reference materials. laurie@insightinsuranceconsulting.com CG Pesticide Or Herbicide Applicator - Limited Pollution Coverage CG AMENDMENT OF LIQUOR LIABILITY EXCLUSION CG