Deductible Endorsement Pertains to Damages

In the ISO deductible endorsement, CG 03 00 01 96, what is intended to be included within the deductible? Would allocated expenses, such as attorney fees or the cost of surveillance be included? The form refers to “damages”, but that term is not defined and we are not sure what would be included in the deductible amount. Can you help with this?

Colorado Subscriber

Damages in this endorsement would have the same meaning that is on the CGL form itself. Of course, that term is not defined on the CGL form, but there are things to point to that make the case that damages are the amounts due for the bodily injury or property damage that the insured caused, and not expenses.

The CGL insuring agreement notes that the amount that the insurer will pay for damages is limited as described in the limits of insurance section of the form. And the limits are stated on the dec page of the policy. These declared limits are the amounts that the insured has available to pay the liability claims against him. Any defense costs are considered as supplementary payments and do not decrease the declared limits of insurance.

Also, going outside the policy itself, the Black's Law Dictionary (Sixth Edition) defines damages as compensation in money for a loss or damage, pecuniary compensation, or indemnity for a person who has suffered a loss.

Based on this, we would say that damages are just the amount of the loss and do not include allocated expenses.

 

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