qq, wdyt · 10/27/2014 1 qq wdyt cgl with irene morrill, cpcu, cic, arm, crm, lia, cris, cpiw vice...

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QQ, WDYT (Quick Question, What Do You Think)

CGL

10/27/2014

1

QQ WDYT

CGLwith

Irene Morrill, CPCU, CIC, ARM, CRM, LIA, CRIS, CPIWVice President of Technical Affairs

Massachusetts Association of Insurance Agents

We have an Insured that owns a building under a trust.

The building houses a restaurant (incorporated) owned and operated by the owner/trustee of the building.

The carrier will not list the trust and the owner/trustee as a Named Insured as requested.

However, the carrier has provided 2 forms they would use to add the trust and owner/trustee:

CG2011 Additional Insured-Managers or Lessors of premises ; CG2026 Additional Insured-Designated Person or

AI status in landlord situation

10/27/2014

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Would you please advise issues adding the trust and owner/trustee as Additional Insured under either Additional Insured Form vs listing as Named Insured.


ISO AI endorsements do not provide sole fault coverage ...

the entity named on CG2011 endorsement is ONLY an insured for that portion of the premises rented and only for liability arising out rental … not necessarily “sole fault” of owner


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Landlords/owners have a right to ask for coverage

But even though all the players seem to be the same …

It is best to have a separate CGL liability policy for pure lessor exposure


CG 20 26 is really when there is no more specific endorsement and it has the more standard ISO AI language of limiting coverage for AI to only when YOU the named insured is at fault in whole or in part

NO sole fault coverage for listed additional insured


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I think the CG 20 11 Additional Insured Managers or Lessors is a better endorsement but I still believe there are nuances where being a named insured on one’s own policy is best


Please advise clarification on the following:

I have an insured that has 2 different names in a business.

The wife owns 100% of one business (office) and the husband owns 100% of the business.

They have two different names.

Can they be combined on a CGL? (personally, I don’t think that they can)Please advise at your earliest. Thank you

Who can be named insured

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I wouldn’t want additional insured …I’d want to be named insured

but

if it is TWO distinct businesses …it is up to the company …

and remember now those two businesses share the aggregate limit.

If the business are not similar … if I were the underwriter …I’d say …NO

Who can be named insured

Irene, I have a commercial question.

I recently quoted a real estate office that also does property management.

Company “T” quoted the professional liability, but declined to write the premises and office exposure, due to the property management.

I went to Company P, they quoted the premises, property and professional, but added an endorsement that excluded BI and PD at any location, that has to do with the management exposure.

Who is an insured or not

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I spoke to the underwriter and she said under the ISO form, who is an insured, real estate agents acting as property managers are insured’s.

That is true, but this is a business charging a fee for their services, and I’m sure their clients do not want to submit a claim under their commercial liability policy for what a contractor caused.


The other issue I have, not all carriers use the ISO form.

Some voluntary writers use their own form, who knows what their forms say about, who is an insured.

So to my questions, do you know if all versions of the ISO form read the same way about, who is an insured, and what would be your advice with this issue?


10/27/2014

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I agree with the underwriter from Penn America that an ISO CGL has stated as an “insured” under the Who is insured section of the CGL for many editions:

b. Any person (other than your "employee" or "volunteer worker"), or any organization while acting as your real estate manager.

But … who in their RIGHT MIND wants to TRUST someone else to buy THEIR insurance. Ok, the company doesn’t want to provide coverage … Company “T” didn’t. But …


A property owner’s policy … COULD revise ANY part of the CGL policy and merely state it uses “copywritten material with permission” …

which means …what …how is the wording actually stated?

Also what limits are there in force at that location?

Has policy premium been paid or is policy cancelled?


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What does “acting as your real estate manager” mean …

or NOT mean …

Does it mean the same under Company P’s policy that EXCLUDES it as it does under the CGL policy of property owner .. is exclusionary language broader than coverage language?


And if they are property manager of buildings insured under a DP policy

the property manager has NOT been added as an insured …


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There is a CGL class code …and W/C also.

I would want the real estate property managementclassified and paid for …

Someone must sell it

Question is as it relates to a non profit who has their CGL with Guard Insurance.

No one at the company can answer my question so I’ll ask you.

As it relates to volunteers:I know the CGL will extend liability for vicarious liability claims that are brought due to the actions of a volunteer working within the scope of the organization.

Who can sue who under the CGL

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The question as it relates to BI is:

Will the BI limit respond to a claim for injuries (apart from the med pay sub limit) if a volunteer were injured while working and had to file a loss for lost wages, etc.?


The CGL is a legal liability policy …

there is NO exclusion for injury TO volunteers as there is for injury to employees …


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If an employee of non-profit injures a volunteer or one volunteer injures another volunteer …the employee and volunteer is not an insured for this under the CGL …but the employer/non-profit is.

This language is in the “who is insured” section.

Under an unendorsed CGL …one insured can sue another insured …so volunteer can sue non-profit …and if non-profit is negligent …there will be compensation. There is no “lost wages” outside liability suit



If volunteer is injured by another volunteer or employee no insured status for negligent employee/volunteer …but if employer/named insured IS legally responsible for negligent supervision or vicarious liability then CGL would respond

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See below, contract requirements from one of our client’s customers, specifically the wording in red.

We’re waiting for a response from Company X regarding the GL, Umbrella and Auto policies to determine if our client is in compliance or would the policies need to be endorsed.

I have a conference call with our client’s General Counsel tomorrow to discuss the requirements including that wording.


Are you familiar with this language and it’s intent?

Client’s policies shall include “severability of interest or cross liability clause wording”

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Who can sue who under the CGLThey want to make sure that the different insureds are “treated singularly” by the severability of interest clause

The ISO CGL …any edition calls it:7. Separation Of Insureds

Except with respect to the Limits of Insurance, and any rights or duties specifically assigned in this Coverage Part to the first Named Insured, this insurance applies: a. As if each Named Insured were the only

Named Insured; and b. Separately to each insured against whom

claim is made or "suit" is brought.


Unendorsed it is doing what the client wants …unless company specific wording screws it up

Bottom line …only one limit of insurance per claim.

Cross liability clause … I think they want to make sure that one insured can sue another insured …which …the unendorsed CGL allows.

Some companies add a cross liability exclusionaryendorsement …so watch out for that.

10/27/2014

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What does your client’s business entail …drones and CGL

So we insure a photographer/videographer –

his CGL is with Hartford, and I am told that the 2 lb drone that he has and he sends up to take pics of me running in the road race, etc….is an “aircraft” and therefore excluded…(personally I don’t think a 2lb drone is an aircraft, but something much larger could be…)

Do you have any thoughts on this…I think this is a huge issue that no one is thinking about…


air·craft [air-kraft, -krahft] Show IPA

noun, plural air·craft.

any machine supported for flight in the air by buoyancy or by the dynamic action of air on its surfaces, especially powered airplanes, gliders, and helicopters.

http://dictionary.reference.com/browse/aircraft

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The HO policy has an "exception for models and hobby" ...due to a claim decades ago.

But no exception for CGL and BOP.

I emailed Bill Wilson, IIABA ...and he says that ISO is "aware" and as far as they are concerned ...it's an aircraft ... and I don't think they really care ... :)


The HO policy has an "exception for models and hobby" ...due to a claim decades ago.

But no exception for CGL and BOP.

I emailed Bill Wilson, IIABA ...and he says that ISO is "aware" and as far as they are concerned ...it's an aircraft ... and I don't think they really care ... :)

10/27/2014

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Could real estate agencies and other types of businesses that might want pictures be at risk???

Cyber issues and CGL exclusion

I was wondering if someone to comment on the attached for me?

Some at our agency think this is a huge implementation,

and others feel we never relied on the CGL to cover Cyber Liab, so how would the exclusion affect us?

I feel the exclusion could be a good thing as it forces the conversation about cyber liability with the insured, and we need to be offering cyber quotes with all PKG/BOP Policies.

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But, that being said, an exclusion could open up coverage gaps as well as E&O issues to the agencies.

Please let me know if there is someone I could discuss this with.


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New endorsement deleting and re-writing the electronic data exclusion of past CGL editions including the 2013


Prior to this endorsement….

some coverage for data breaches as a form of invasion of privacy had been acknowledged by most insurers.


10/27/2014

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The new language is "damages-based,"

like the current recall of products exclusion,

rather than being directed to bodily injury and/or property damage.


applicable to statutorily imposed damages andother mandated expenses

in connection with laws governing data breaches.


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paragraph (1) applies not only to a breach of electronic data securitybut to ANY information –

eliminating coverage for liability from allowing access to private information stored in any form.


ease and convenience that large amounts of data can be stored electronically—

with the ease with which such data can be accessed in unauthorized fashion—

created the loss exposure that general liability insurers are no longer willing to insure automatically


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Also excludes loss of use or data …of course


not exclusively target electronic data breach exposures,

the exclusion does specifically name the types of stored data that have produced the most costly and widely publicized losses—

customer lists, financial information, and credit card information.


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The exclusion will apply to "notification costs, credit monitoring expenses, forensic expenses, public relations expenses," and other expenses incurred by any party as a result of unauthorized access to information.

third paragraph of the exclusion addresses several categories of expense that have typically accompanied large-scale data breaches,especially those involving customers' or employees' credit account information.


Good news …rewrite of exclusion STILL has exception for damages because of BI …that had been added back into coverage under 2013 CGL edition!


10/27/2014

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Just additional reason to sell

Cyber liability insurance


One of my larger accounts is a contractor that provides HVAC and generator maintenance services and I process hundreds of certificate of insurance requests per year.

The GL policy includes broadening endorsements that include entities as AI on a primary/non-contributory basis including a waiver of subrogation all if agreed to in a written contract or agreement prior to loss.

The issue that I am having is that nine times out of ten the entities that are requesting the certificate of insurance with the AI status requirement plus everything else under the sun are the building or property owners for the location where my client’s direct client resides.

AI and COI

10/27/2014

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In order for my client to gain access to the building to perform the services for their client they must present a certificate of insurance that meets the building owner’s specific requirements. If my client can not then the building owner does not allow access to the property.

I know there is no direct contract between my client and these building owners so I’m thinking the only way I can issue the certificate indicating additional insured status is to endorse the building owner on as an additional insured. However, I’ll be endorsing the policies almost on a daily basis.

AI and COI

At one point I was issuing certificates indicating additional insured status “only if required in a written contract” but I’m thinking this implies additional insured status even though most likely there is none, which could be a problem for our agency.

Do you agree that the only way to issue the COI that notes the AI status for the building owner is to endorse the policy…especially if I know there is no direct contract with the building owner?

I know there is that new GL endorsement that extends additional insured status to “other parties” but it still relates to a written contract.

AI and COI

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I’ve discussed this at length with my manager and we would love any input you might provide, as we do not have too many contractor clients where this type of situation exists.

AI and COI

I think you do need the CG 20 38 the new 2013 endorsement that creates automatic AI status for ANYONE ...that a written contract requires.

If your client is NOT involved in a written contract with the entity where they are doing work ...

then a specific endorsement would be necessary for that situation adding the building owner

AI and COI

10/27/2014

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While we’re here …

what is wrong with the CG 20 33 in this case…

And while we are at it …look at the 2004 v. the 2013 versions

AI and COI

Why this endorsementdoesn’t work in this question …

It DOES require agreement in WRITING

CG 20 33 07 04AI and COI

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Blanket additional insuredendorsement … for prem/ops

Like CG 20 10 no “sole fault” coverage for additional insureds

CG 20 33 07 04Review of ISO 2004 AI endorsements

Requireswrittenrequest

Prem/oponly


10/27/2014

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Took “insured contract” language that restricted broad contractualassumption of tort liability for a 3rd

party in the definition in CGL

And MADE it an exclusion for AI


The definition of “insuredcontract” states there is no assumption of liability for injury or damage arising from error or omission in the professional services provided to third parties by architects, engineers or surveyors


Portion of “insured contract” definition

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SO …No contractual coverage

And no

Insured status coverageBI/PD/PIAI arising out of professional,engineering, orsurveying services


2013 version of AI endorsements

Add language regarding state law

Add language potentially restricting limit available to AI

Add language potentially restricting coverage afforded by AI endorsement

AI and COI

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CG 20 33 Owners,Lessees, ContractorsAutomatic AI –

Has same changes1) Extent of law2) Extent of

coverage

AI (2013 version) and COI


Even MORE language addedTo exclusion forProfessionalLiability ofArchitects, etc


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Adds language regarding negligentSupervision, hiring,Training, monitoring,For claims involving BI/PD/PI&AI

and rendering or failure to render professional services


CG 20 33 Owners, Lessees, Contractors, Automatic AI

Last part of automatic insured endorsement adds the 3rd restriction of coverage to limits required in contract if less than policy limits


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67

2013 changes to AI endorsement

1. Restrict AI coverage to that allowed by law

2. Restrict AI coverage limit to that required in contract

3. Limit of insurance provision also modified with these changes


68

Endorsements changed2013 AI endorsements changed

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This HVAC client who had to prove AI status to building owners when doing work in tenant space.

Was there a contract between the building owner and the tenant requiring all who do work for tenant provide additional insured status for building owner when working on the premises?

We know that the CG 20 33 won’t work since HVAC client not direct contract with building owner…what to do?

Once upon a time ……

A general contractor (GC) wanted AI status.

GC subcontracted out the steel fabrication and erection to a subcontractor (SC).

SC subcontracted out the steel erection to a sub-subcontractor (SCC).

GC’s contract with SC required SC to obtain a CGL policy that would cover not only the SC and its employees, but also the GC

Employer exclusion and AI status

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Contract mandated that ANY sub-subcontractors that the subcontractor might further subcontract with are required to

maintain the SAME limits of CGL insuranceinclude GC as an additional insured

(SCC contractually required to purchase insurance to cover itself, SC, and GC)

SCC had the CG 20 33 Automatic Additional insured endorsement attached to its CGL


An employee of SCC injured during operations.

SCC employee sued GC and SC alleging breach of duties of care.

(Yes …this CAN happen…


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SCC ‘s CGL COULD respond …

if endorsed correctly since Coverage A exclusion for injury to employee would NOT apply –

Employer’s liability exclusion only applies to THE employer of THE injured employee.

If I injure YOUR employee and am AI on your CGL …this exclusion only applies to YOU


Exclusion does NOT apply to liability assumed in contract


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This case was Westfield Insurance Co. v. FCL Builders, Inc. 948 N.E.2d 115(App. Ct., IL, 1st Dist. 2d Div 2011)

The SC was considered an automatic additional insured under SCC policy …

GC was NOT considered an automatic additional insured under SCC policy

Also …Brooklyn Hosp. Center v. One Beacon Ins (NY 2004)Same issue


Interesting to me …how about YOU… I wonder what agent stated on certificate???

I wonder when certificate was sent to GC by SCC if the column for AI status was designated???


10/27/2014

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We saw what Automatic AI Endorsement saidFYI … United Stationers Supply Co. v Zurich AM. Inc. CO., (Illinois 2008)Contract stated AI status required for W/C and EL, contractual liability insurance , auto liability … guess what –contractual liability insurance is NOT CGL


2004 version

OOOPS …

even the NAME of the endorsement is “dangerous”

Required in constructionagreementWITH YOU


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SCC might beperformingoperations for GC … But SCC did NOT agreein writing WITH GC

SCC agreed in writing with SC …


2004 version

1) Get AI status if contract in writing with NAMED Insured

2) prem/op only (ARE performing operations)


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2004 version

3) AI only gets insured status if named insured atleast PARTIALLY at fault …no sole fault coverage


2004 version

Was there any way for SCC To meet contract requirement for GCC?


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CG 20 38 04 13

Title of endorsementIs different …

Automatic status forOTHER PARTIES when required INA construction agreement

New blanket AI endorsement in 2013 filingEmployer exclusion and AI status

CG 20 38 04 13Who become an Insured?1) Anyone you are working for

if YOU agreed in writing toprovide insured status forTHAT/SUCH person

Same language as CG 20 33


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CG 20 38 04 13Who become an Insured?

2) ANYONE or THING else that YOU are required to add as additional insuredTHIS language is whatSCC needed in that court case


CG 20 38 04 13Who become an Insured?

HURRAH!!!!!

I would no longer Want the CG 20 33 …But ALWAYS ask for the CG 20 38 for automatic AI status

New blanket AI endorsement in 2013 filingProper AI status when not directly contract

If the HVAC client had to sign a contract with tenant stating that building owner was granted AI status …then this would be the automatic AI endorsement that agent needed!

10/27/2014

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Insured is going to Bermuda and wants to rent a “motorized oped/bicycle”.

Client has CGL in his name. I know that HO policy won’t provide liability coverage because it’s a motor vehicle and neither will MAP because it is not US …but would CGL respond?

Mopeds and cgl

The CGL excludes BI/PD arising out of "autos" owned by, rented to, loaned to, used by an insured.CGL 2004/2007/2013 definition” of auto:

2. "Auto" means:a. A land motor vehicle, trailer or semitrailer designed

for travel on public roads, including any attached machinery or equipment; or

b. Any other land vehicle that is subject to a compulsory or financial responsibility law or other motor vehicle insurance law in the state where it is licensed or principally garaged.

However, "auto" does not include "mobile equipment".

Mopeds and cgl

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CGL considers motor vehicles designed for on road use to be autos …and then there is the exclusion:

Mopeds and cgl

We have been seeing the attached exclusion form on GLI policies.

A few companies refuse to remove it from the policy and one decide to remove it for $100.00.

Have you seen this and what do you think about it?

Employer being sued

10/27/2014

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Employer liability exclusion

Thisendorsementis WAY beyond BI to one’s employee

It also excludesinjury to Independentcontractors


The unendorsed CGL WOULD “entertain” a suit by the independent contractor against the named insured.

The CGL allows additional insureds to sue each other ….

This could be a dangerous endorsement!!!!

10/27/2014

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A certificate holder wants proof of “broad form contractual” coverage…

is that covered under my insured’s CGL …

or not?


Broad form contractual ...is a "pre-simplified" term.Before simplification we had the "comprehensive general liability coverage".. WHICH WASN'T.

Contract coverage was only the "incidental" and you needed a "broad form endorsement" which added broad from contractual, employees as insureds, fire legal ... and a few other things that "escape" me know.


10/27/2014

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The first "simplified" CGL was the "commercial general liability" policy ...which was MORE comprehensive than the "comprehensive general liability policy" ..its predecessor.

"Broad form contractual" was "built in" ... which we now know and love as the "insured contract" definition ..which lists the incidentals ..and then gives "best section" :


This doesn't SAY that it is broad form contractual ...but it is.

In fact there is a "contractual limitation" endorsement which revises the insured contract definition ...

removing the above and only giving the "incidental" contracts ...leases, etc.,


10/27/2014

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Old terms "die hard" ...

businesses probably want us to say "broad form contractual" ...

and that IS what they have ...but we don't say it ..

just as the policy doesn't really discuss "fire legal liability" ... like it did in the broad form endorsement ... it merely states:


As long as the Contract limitation endorsement CG 21 39 is NOT on the policy ...

and it IS a simplified ISO CGL ...

saying "broad form contractual" is not an "incorrect" thing but ..

the words are not exactly in the policy as they WERE in the Broad Form endorsement that used to be added to the pre-simplified CGL.


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Being an “indemnitee” doesn’t guarantee defense

Might be supplementary payment IF the Indemnitee follows ALL the requirements

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Being an “indemnitee” doesn’t guarantee defense

Or it reduces the Coverage A limit …if itMeets this criteria

If contract doesn’t require defense then No coverage

qq, wdyt · 10/27/2014 1 qq wdyt cgl with irene morrill, cpcu, cic, arm, crm, lia, cris, cpiw vice...

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