Revisions to the Insurance Services Office’s (ISO) Commercial General Liability (CGL) coverage forms became effective April 1, 2013. These changes were introduced after industry requests for clarity on issues that were frequently disputed in coverage litigation as well as for additional underwriting options. The revised forms and new endorsements afford casualty insurers the ability to more clearly define policy rights and obligations and meet policyholders’ particular insurance needs.
Key revisions and endorsements include:
- Revised forms providing more broadly defined exclusions for claims based on conduct prohibited by federal statutes such as the Telephone Consumer Protection Act, Fair Credit Reporting Act and Fair and Accurate Credit Transactions Act
- An endorsement removing rights of privacy violation claims from the CGL policy’s coverage for “personal and advertising injury” liability
- An endorsement eliminating the need for contractual privity between a policyholder and proposed additional insured
- Numerous provisions harmonizing additional insured coverage with a policyholder’s contractual obligations to the proposed additional insured
- New language limiting additional insured coverage to the extent permitted by state anti-indemnity statutes or common law
- An endorsement modifying the “other insurance” clause to clarify that coverage granted to an additional insured shall be the sole primary coverage for the loss if a contract between the parties so provides
- Revised professional services exclusions clarifying that claims for negligent supervision, hiring, employment, training or monitoring fall within the exclusion if the event causing injury or damage involved the rendering or failure to render professional services
The new ISO forms present opportunities for insurers — ranging from managing potential exposure for costly privacy and consumer protection claims to individual tailoring of additional insured coverage — and they should evaluate whether to adopt them in their policy offerings. As with the use of any new policy language, insurers should also consider whether the new forms limit coverage previously provided and, if so, provide proper notification to policyholders.