Summary: Several endorsements relate to products and completed operations coverage. Following are descriptions of some of them, and the circumstances in which they may be used.

Guide to Endorsements: Additional Insured—Concessionaires Trading Under Your Name CG 20 03 Additional Insured—Vendors CG 20 15 Additional Insured—Owners, Lessees CG 20 37 Contractual Liability Limitation CG 21 39 Exclusion—Designated Products CG 21 33 Exclusion—Germination Failure CG 22 26 Exclusion—Intercompany Products Suits CG 21 41 Non-Binding Arbitration CG 24 01 Waiver of Transfer of Rights CG 24 04 Products and Completed Operations Hazard Redefined CG 24 07 Amendment of Insured Contract Definition CG 24 26

CG 20 03 04 13

Additional Insured—Concessionaires Trading Under Your Name

Concessionaires operating on the named insured's premises and under the named insured's name may be given additional insured status with respect to the named insured's products and completed operations coverage. This is done by adding endorsement CG 20 03 to the named insured's policy. The premium charge is referred to the company. The endorsement states that the “who is an insured” section of the coverage part is amended to include as an insured the concessionaire(s) designated in the schedule but only with respect to their liability as a concessionaire trading under the named insured's name. The insurance afforded to the additional insured only applies to the extent permitted by law. Moreover, if coverage provided to the additional insured is required by a contract or agreement, the insurance provided to the additional insured will not be broader than that which the named insured is required by the contract or agreement to provide. The most the insurer will pay under the terms of CG 20 03 is the amount of insurance required by the contract or agreement or the amount available under the applicable limits of insurance shown in the declarations, whichever is less.

CG 20 15 04 13

Additional Insured—Vendors

Because of numerous court decisions holding that anyone who might be in the chain of distribution of products could be held liable for injury arising out of the products, many large chain and department stores will not handle merchandise unless the wholesaler or manufacturer from whom they buy the merchandise carries products liability insurance with adequate limits and the store included as an additional insured. Additionally, distributors or manufacturers may want to extend their products coverage for the benefit of their licensed dealers, as is sometimes the case for merchandisers of cosmetics, weight loss diet supplements, and other consumer goods sold door-to-door or through “home parties.”

CG 20 15 is used for making designated vendors additional insureds with respect to bodily injury or property damage arising out of the named insured's products distributed or sold in the regular course of the vendor's business. These products, along with the person or organization who is the vendor, must be scheduled on the endorsement or on the declarations page. The best way to describe the scope of coverage here is that the endorsement not only covers the vendor's liability as the conduit, but also as an instrumentality of products. The vendor is a conduit because of its role in the stream of commerce between it and the distributor or manufacturer; the vendor is an instrumentality in the sense that it physically handles the product.

However, the endorsement imposes certain restrictions on coverage, creating pitfalls that would not exist if the vendor carried products liability insurance in its own name. The CG 20 15 lists several exclusions. Damages that the vendor is obligated to pay by reason of the assumption of liability in a contract or agreement are excluded. The insurance afforded the vendor does not apply to any express warranty unauthorized by the named insured, to any physical or chemical change in the product made intentionally by the vendor, or to repackaging except under certain conditions. Other exclusions on the endorsement deal with the failure to make inspections or tests that the vendor has agreed to make or normally undertakes in the usual course of business; with demonstrations, installations, servicing or repair operations except such operations performed at the vendor's premises in connection with the sale of the product; and with products that, after distribution or sale by the named insured, have been labeled or relabeled or used as a container, part, or ingredient of any other thing or substance by or for the vendor. There is also an exclusion for bodily injury or property damage arising out of the sole negligence of the vendor for its own acts or omissions or those of its employees or anyone else acting on its behalf, although this exclusion does not apply to such inspections, adjustments, tests or servicing as the vendor has agreed to make or normally undertakes to make in the usual course of business, in connection with the distribution or sale of the products. Finally, the insurance does not apply to any insured person or organization from which the named insured has acquired such products, or any ingredient, part or container, entering into, accompanying or containing such products.

Note also that the insurance afforded to the vendor only applies to the extent permitted by law, and if coverage is required by a contract or agreement, the insurance afforded to the vendor will not be broader than that which the named insured is required by the contract or agreement to provide. Furthermore, if coverage provided to the vendor is required by a contract or agreement, the most the insurer will pay is the amount required by the contract or agreement, or the amount available under the applicable limits of insurance shown in the declarations, whichever is less.

CG20 37 04 13

Additional Insured—Owners, Lessees or Contractors—Completed Operations

This endorsement amends the who is an insured clause too include as an additional insured the person or organization shown in the schedule, but only with respect to liability for bodily injury or property damage caused, in whole or in part, by the work of the named insured at the location designated in the schedule of the endorsement performed for that additional insured and included in the products-completed operations hazard (as defined).

The insurance afforded to the additional insured only applies to the extent permitted by law, and if coverage is required by a contract or agreement, the insurance afforded will not be broader than that which the named insured is required by the contract or agreement to provide.

CG 21 33 11 85

Exclusion—Designated Products

This endorsement may be used to modify insurance provided under the products and completed operations liability coverage part or the commercial general liability form. The endorsement states that the insurance does not apply to bodily injury or property damage included in the products – completed operations hazard and arising out of any product shown in the schedule. CG 21 34 is similar in wording to CG 21 33, but excludes designated work rather than designated products.

CG 21 39 10 93

Contractual Liability Limitation

This endorsement replaces the definition of an “insured contract” that is found in the products – completed operations liability coverage form and in the  commercial general liability coverage form with one that states that an “insured contract” means: a contract for a lease of premises (however, that portion of the contract for a lease of premises that indemnifies any person or organization for damage by fire to premises while rented to the named insured or temporarily occupied by the named insured with permission of the owner is not an insured contract); a sidetrack agreement; any easement or license agreement, except in connection with construction or demolition operations on or within fifty feet of a railroad; an obligation, as required by ordinance, to indemnify a municipality, except in connection with work for a municipality; or an elevator maintenance agreement. This endorsement, in brief, removes paragraph (f) from the standard definition of insured contract.

CG 21 41 11 85

Exclusion—Intercompany Products Suits

Any claim for damages by any named insured against another named insured arising out of the products of the named insureds is excluded by this endorsement. Thus, if intercompany entities sue one another due to products claims, CG 21 41 will preclude any coverage under the products and completed operations form or CGL.

CG 22 26 01 87

Exclusion—Germination Failure

This endorsement states that the insurance does not apply to property damage arising out of failure of seed to germinate. It modifies both the products and completed operations liability coverage part and the CGL coverage part.

CG 24 01 12 04

Non-Binding Arbitration

If the insured and the insurer do not agree whether coverage is provided for a claim, this endorsement allows for either party to make a written demand for arbitration. The usual procedures for choosing arbitrators are followed but any decision agreed to by the arbitrators may be appealed to the court. CG 24 02 calls for binding arbitration, and a decision agreed to by two of the arbitrators is binding on the parties involved.

CG24 04 05 09

Waiver of Transfer of Rights of Recovery

This endorsement notes that the insurer waives any right of recovery it may have against the person or organization shown in the schedule because of payments the insurer makes for injury or damage arising out of the named insured's ongoing operations or the named insured's work done under a contract with that person or organization and included in the products-completed operations hazard. The transfer of rights of recovery condition in the coverage form states that if the insured has rights to recover all or part of any payment the insurer has made, those rights are transferred to the insurer. This endorsement specifically waives those rights.

CG 24 07 01 96

Products and Completed Operations Hazard Redefined

This endorsement begins with a description of premises and operations to which the coverage applies. CG 24 07 then states that a part of the definition of “products – completed operations hazard” is replaced so that the products – completed operations hazard includes all bodily injury and property damage that arises out of the named insured's products if the injury or damage occurs after the named insured has relinquished possession of those products. This change in the definition is made with respect to bodily injury or property damage arising out of the named insured's products that are manufactured, sold, handled, or distributed on, from, or in connection with the use of the premises described at the beginning of the endorsement, or in connection with the conduct of the operations described at the beginning of the endorsement. This applies whether the named insured conducts the operations or whether they are conducted on behalf of the named insured.

The CG 24 07 is used basically for insureds whose operations involve a substantial exposure to products and completed operations liability on their own premises; a restaurant is a prime example. So if a customer buys a hamburger and eats it on the premises of the named insured and suffers a bodily injury, this endorsement brings any claim based on that injury under the definition of products – completed operations hazard, and makes the claim subject to the aggregate limits applicable to the products and completed operations hazard.

CG 24 26 04 13

Amendment of Insured Contract Definition

This is an endorsement is a tool for underwriters that want to exclude coverage for tort liability assumed under a contract when the indemnitor or anyone acting on the indemnitor's behalf does not cause, in whole or in part, the injury or damage involved in the claim. The endorsement replaces the policy definition of insured contract with the intent to reduce the degree of coverage having to do with contractual liability.