The PF&M Companion is a service of the Policy, Form and Manual Analysis Service, published by the Rough Notes Company, Inc. Policy, Form and Manual Analysis (PF&M), continually updated since 1929, is the personal, commercial, and specialty policy and form analysis service provided by the Rough Notes Company. PF&M is available in paper, on disk in Three Part Harmony, and on CD-ROM through Silver Plume as Rough Notes. For more information on this service call 1-800-428-4384.
Includes copyrighted material of Insurance Services Office, Inc., or ISO Commercial Risk Services, Inc., with its permission; ©Copyright, Insurance Services Office, Inc., 1997 ©Copyright, ISO Commercial Risk Services, Inc., 1997.
CAUTION: Not all insurance companies use ISO forms. Some companies ask ISO to file forms, rules, and loss cost adjustments for them; other companies file for themselves. You will need to find out from each of your companies whether or not revisions or new forms will be adopted, and on what date the form, rule or loss cost adjustments will become effective.
By Diana Kowatch, CPCU, AU, AAM, CPIW
COUNTRYWIDE
1996 REVISIONS TO THE GENERAL LIABILITY MULTISTATE ENDORSEMENTS
A number of important revisions have been made to the Commercial General Liability Program including:
Whenever the named insured in one policy is also an additional insured under another policy, the first policy will be excess. Two new endorsements have been developed--Amendment of Other Insurance Condition (Occurrence Version), CG 00 55, and Amendment of Other Insurance Condition (Claims-Made Version), CG 00 56.
Also, two claims-made endorsements have been developed: CG 27 10, Supplemental Extended Reporting Period Endorsement With Amendment of Other Insurance Condition and CG 27 11, Supplemental Extended Reporting Period Endorsement For Specific Accidents Products, Work or Locations With Amendment of Other Insurance Condition.
The claims-made endorsements replace two existing ones which have been withdrawn: CG 27 01, Supplemental Extended Reporting Period Endorsement; and CG 27 04, Supplemental Extended Reporting Period Endorsement For Specific Accidents Products, Work or Locations.
New endorsements have been developed to allow the addition of additional insureds without being required to name each one: GL 20 33, Additional Insured-Owners, Lessees or Contractors Automatic Status When Required In Construction Agreement With You; and CG 20 34, Additional Insured-Lessor of Leased Equipment-Automatic Status When Required In Lease Agreement With You.
Clarifications in the form of revised titles have been made regarding the usage of additional insured endorsements: CG 20 09, Additional Insured-Owners, Lessees or Contractors, Scheduled Person or Organization (For Use When Contractual Liability Coverage Is Not Provided To You In This Policy); CG 20 10, Additional Insured-Owners, Lessees or Contractors-Scheduled Person Or Organization.
New endorsement, CG 00 54 - Amendment of Pollution Exclusion - Exception for Building Heating Equipment. This endorsement provides coverage for bodily injury resulting from the release or escape of smoke, fumes, vapor or soot from heating equipment.
Endorsement CG 21 37, Exclusion-Employees As Insureds, has been revised to clarify that coverage is excluded even in aircraft, auto or watercraft situations.
A new endorsement was written to exclude all pollution except that from hostile fire: CG 21 55, Total Pollution Exclusion With A Hostile Fire Exception.
A number of new endorsements were developed and the existing endorsement revised to clarify specifically the professional liability exclusion. The revised endorsement is CG 22 33, Exclusion-Testing or Consulting Errors and Omissions. The new endorsements are: CG 21 59, Exclusion--Diagnostic Testing Laboratories; CG 21 56, Exclusion--Funeral Services; CG 21 58, Exclusion--Professional Veterinarian Services; and CG 21 57, Exclusion--Counseling Services.
It has been determined that CG 22 49, Exclusion--Patient Injury is not necessary due to the wording of the CGL and other mandatory class endorsements; therefore, this particular endorsement has been withdrawn.
Endorsement CG 22 74, Amendment of Contractual Liability Exclusion for Personal Injury Limited To False Arrest, Detention or Imprisonment For Designated Contracts or Agreements, has been revised to strengthen the wording and intent.
It has been determined that endorsement CG 24 10, Excess Provisions--Vendors, is a duplicate of coverage afforded in the underlying policy; therefore, this endorsement is no longer necessary and has been withdrawn.
Revisions were made to endorsements CG 25 03, Amendment--Aggregate Limits of Insurance (Per Project); and to CG 25 04, Designated Location(s) General Aggregate Limit Endorsement, in order to clarify how the various aggregate limits will apply.
Listed below, under the individual states, will be those that have approved the above revisions. This text will not be repeated but will refer back to this Countrywide section.
01/97 REVISIONS TO THE BUSINESSOWNERS POLICY
Major changes have been made to the BOP Program. Listed below is a brief summary of the changes. For further details see article on page xx of this issue. In the area of eligibility, the changes include but are not limited to the following:
* Eligibility has been revised to increase the maximum square footage from 15,000 to 25,000.
* The maximum gross sales limit has been increased from $2,000,000 to $3,000,000.
* An increase in the number and types of classes of business now eligible for the BOP Program include many of the artisan-type contractors, limited cooking and fast-food type restaurants (square footage on this class is 7,500), convenience stores with gasoline pumps, and laundry/dry cleaners.
Rating for the contractors classes will be split between property and liability with separate rating basis for each. Other classes will continue to use a single rating base for the present.
The base property deductible has been increased to $500 to mirror the Commercial Property Program with an option to decrease to $250.
Program coverage enhancements include:
* full exterior glass coverage
* increase in the limit for newly acquired personal property from $10,000 to $100,000 per location
* now included are $5,000 of accounts receivable coverage
* now included are $5,000 of valuable papers coverage
* now included are $5,000 or 5% of building limit for increased cost of construction coverage as a result of ordinance or law
Options are now available to increase or add the following coverages:
* a $2,000,000 limit of liability option has been added to the liability coverage
* option to add contingent business income
* option to increase valuable papers over the $5,000 basic
* option to increase accounts receivable over the $5,000 basic
* option to add utility services equipment failure
* additional options available for money and securities coverage
* options to add professional liability for a limited number of business types
The above listed changes are only a portion of the overall changes to the BOP Program. Please review the entire program carefully before using.
Listed below under the individual states, will be those that have approved the above revisions. This text will not be repeated but will refer back to this Countrywide section.
ALABAMA
The 1996 Revisions To The General Liability Multistate Endorsements have been approved--see Countrywide above. These changes apply to all policies written on or after April 1, 1997.
ARIZONA
The 1996 Revisions To The General Liability Multistate Endorsements have been approved--see Countrywide above. These changes apply to all policies written on or after April 1, 1997.
The 01/97 Revisions To The Businessowners Policy have been approved--see Countrywide above. These changes apply to all policies written on or after April 1, 1997.
ARKANSAS
The 1996 Revisions To The General Liability Multistate Endorsements have been approved--see Countrywide above. These changes apply to all policies written on or after April 1, 1997.
CALIFORNIA
The 1995 Commercial Crime Revisions to the Commercial Crime Program has been approved in California. CR 00 19--Money Orders and Counterfeit Paper Currency Coverage Form R has been approved. Editorial clarifications have been made to CR 10 00, Crime General Provisions that have no coverage or rating impact. Endorsement CR 30 01, Include Fire Damage, has been withdrawn because fire coverage is now provided in CR 00 13, Liability For Guests Property--Premises Coverage Form L, making this endorsement no longer necessary. Related loss costs and rules have been developed accordingly. The approval date is September 4, 1996.
COLORADO
The 1996 Revisions To The General Liability Multistate Endorsements have been approved--see Countrywide above. These changes carry a distribution date of April 1997.
CONNECTICUT
The 1996 Revisions To The General Liability Multistate Endorsements have been approved--see Countrywide above. These changes apply to all policies effective on or after June 1, 1997.
DELAWARE
The 1996 Revisions To The General Liability Multistate Endorsements have been approved--see Countrywide above. These changes apply to all policies written on or after April 1, 1997.
DISTRICT OF COLUMBIA
The 01/97 Revisions To The Businessowners Policy have been approved--see Countrywide above. Included in this approval are state-specific supplements and amendments. These changes apply to all policies written on or after April 1, 1997.
FLORIDA
The 01/97 Revisions To The Businessowners Policy have been approved--see Countrywide above. These changes apply to all policies written on or after May 1, 1997.
GEORGIA
The 1996 Revisions To The General Liability Multistate Endorsements have been approved--see Countrywide above. These changes apply to all policies written on or after April 1, 1997.
IDAHO
The 1996 Revisions To The General Liability Multistate Endorsements have been approved--see Countrywide above. These changes apply to all policies written on or after April 1, 1997.
ILLINOIS
The 1996 Revisions To The General Liability Multistate Endorsements have been approved--see Countrywide above. These changes apply to all policies written on or after April 1, 1997.
INDIANA
The 1996 Revisions To The General Liability Multistate Endorsements have been approved--see Countrywide above. These changes apply to all policies written on or after April 1, 1997.
Four (4) new mandatory amendatory endorsements have been developed and two existing ones have been revised as a result of the following Indiana Supreme Court decision regarding pollution exclusion language: American States Ins. Co., vs. Kiger, 662 N.E.2d 545 (IN.1996) and Seymour Manufacturing Co., vs. Commercial Union Ins. Co., 665 N.E.2d 891 (IN 1996). The revised endorsements are:
* BP 01 35, Indiana Changes (BOP)
* CA 01 19, Indiana Changes (Business Auto, Garage, Truckers, and Motor Carrier)
The new endorsements are:
* CG 01 23, Indiana Changes--Pollution Exclusion, (CGL)
* CG 28 10, Indiana Changes--Pollution Exclusion, (OCP)
* CG 28 11, Indiana Changes--Pollution Exclusion, ((Railroad Protective Liability)
* IL 01 92, Indiana Changes--Pollution Exclusion, (Commercial Property and Farm)
These new mandatory forms and resulting rule changes apply to all policies written on or after March 1, 1997.
KANSAS
The 1996 Revisions To The General Liability Multistate Endorsements have been approved--see Countrywide above. These changes apply to all policies written on or after April 1, 1997.
LOUISIANA
The multistate Homeowners Loss Settlement And Valuation Endorsements have been approved in Louisiana in order to provide additional loss settlement and valuation options to homeowners policies. The new endorsements developed for use with Homeowners Coverage Forms HO 00 02 and HO 00 03 are:
* Actual Cash Value Loss Settlement (HO 04 81)--provides actual cash value for all covered property, including building.
* Modified FRC Loss Settlement (HO 05 31)--for use in jurisdictions where state law prohibits loss settlement in an amount less than the ACV of the damaged property. This endorsement makes sure that the settlement is not less than the ACV.
Note that Louisiana requires a disclosure notice with each policy to which either of the new endorsements is attached. These changes apply to all policies that are effective on or after December 1, 1996.
MAINE
The 1996 Revisions To The General Liability Multistate Endorsements have been approved--see Countrywide above. These changes apply to all policies written on or after April 1, 1997.
MASSACHUSETTS
The 1996 Revisions To The General Liability Multistate Endorsements have been approved--see Countrywide above. These changes apply to all policies written on or after April 1, 1997.
MISSISSIPPI
The 1996 Revisions To The General Liability Multistate Endorsements have been approved--see Countrywide above. These ch anges apply to all policies written on or after April 1, 1997.
MISSOURI
The 1996 Revisions To The General Liability Multistate Endorsements have been approved--see Countrywide above. These changes apply to all policies written on or after April 1, 1997.
NEW HAMPSHIRE
The 1996 Revisions To The General Liability Multistate Endorsements have been approved--see Countrywide above. These changes apply to all policies written on or after April 1, 1997.
NEW JERSEY
Personal Auto Endorsement PP 01 81, Amendment of Policy Provisions-New Jersey, has been revised to comply with New Jersey regulations N.J.A.C.11:3-34.4 and 11:3-35.4 to indicate that the insurer may cancel coverage when a named insured, household member, or person who customarily uses a covered auto has his or her license suspended or revoked, but only if the suspension or revocation results from a serious motor vehicle violation specified in the regulations. This change applies to all policies written on or after January 1, 1997.
Commercial Auto Endorsements CA 22 30, New Jersey Personal Injury Protection; and CA 22 31, New Jersey Added Personal Injury Protection, have been revised to follow the decision made by the New Jersey Superior Court in the case of Swydersky versus Prudential Commercial Insurance Co., 263 NJ Super. 544, 623 A.2d 310 (1993). In that case, it was decided that a resident member of the insured's family under a PIP policy was bound by the cost-containment option selected by the named insured; but an economically independent resident was not subject to the reduction in PIP benefits. Because the economically independent relatives would not benefit from any premium savings, according to the court, they should not be bound to reduced coverage.
A change that applies to CA 22 30 only was made to clarify that interpolicy stacking of limits does not apply to the extended medical expense benefits coverage when it would not result in double recovery. This is a result of the New Jersey Supreme Court ruling made in Ingersoll and Lihou versus Aetna Casualty and Surety Company, 138 NJ 236, 649 A.2d 1269 (NJ 1994). Other editorial and clarification changes were also made. These revisions apply to all policies written on or after March 1, 1997.
NEW YORK
A new personal lines endorsement, HO 03 40, Windstorm Percentage Deductible, has been approved to allow percentage deductible options in the amount of 1%, 2%, or 5% of the limit of liability for the causes of loss windstorm only. In addition, provision is made for fixed-dollar deductibles in the amounts of $1,000, $2,000, and $5,000. This new endorsement replaces the following: HO 03 22, Windstorm Deductible; and DP 03 13, Windstorm Deductible. These changes apply to all policies written on or after January 1, 1997.
NORTH CAROLINA
The 1996 Revisions To The General Liability Multistate Endorsements have been approved--see Countrywide above. These changes apply to all policies effective on or after June 1, 1997.
OHIO
The 1996 Revisions To The General Liability Multistate Endorsements have been approved--see Countrywide above. These changes apply to all policies written on or after April 1, 1997.
OKLAHOMA
The 1996 Revisions To The General Liability Multistate Endorsements have been approved--see Countrywide above. These changes apply to all policies written on or after April 1, 1997.
The 01/97 Revisions To The Businessowners Policy have been approved---see Countrywide above. Included in this approval are state-specific supplements and amendments. These changes apply to all policies written on or after April 1, 1997.
SOUTH DAKOTA
The 01/97 Revisions To The Businessowners Policy have been approved--see Countrywide above. These changes apply to all policies written on or after April 1, 1997.
TENNESSEE
The 1996 Revisions To The General Liability Multistate Endorsements have been approved--see Countrywide above. These changes apply to all policies written on or after April 1, 1997.
UTAH
The 1996 Revisions To The General Liability Multistate Endorsements have been approved--see Countrywide above. These changes apply to all policies written on or after April 1, 1997.
The 01/97 Revisions To The Businessowners Policy have been approved--see Countrywide above. These changes apply to all policies written on or after April 1, 1997.
VERMONT
The 01/97 Revisions To The Businessowners Policy have been approved--see Countrywide above. Included in this approval are state-specific supplements and amendments. These changes apply to all policies written on or after April 1, 1997.
WISCONSIN
The Wisconsin Insurance Department has acknowledged and approved the withdrawal of the claims-made professional liability program. Forms GL 00 21, Standard Coverage Part--Hospital Professional Liability Insurance (Claims-Made) and CL 00 22, Standard Coverage Part--Physicians, Surgeons and Dentists Professional Liability Insurance (Claims-Made) are no longer available. These changes apply to all policies written on or after February 1, 1997.
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