Summary: In April 2017 ISO introduced revisions to the CG 21 44 04 17 endorsement, Limitation of Coverage to Designated Premises or Project. The revision changes the name to Limitation of Coverage to Designated Premises, Project, or Operation and provides for limitations and specifications that did not seem necessary until a string of court cases arose in 2016 expanding the coverage area to an almost unfathomable size.

Topics Covered: Introduction 1998 Form Language 2017 Form Revisions Coverage A Coverage B Coverage C Relevant Court Cases Conclusion

Introduction

The standard commercial general liability (CGL) form usually provides insurance coverage for operations of the named insured whether on or off-premises. However, this comprehensive coverage can be limited by endorsements attached to the CGL form. One endorsement that limits the locational coverage of the CGL form is CG 21 44, Limitation of Coverage to Designated Premises or Project. This endorsement is also known as the designated premises endorsement (DPE). The purpose of this endorsement is to limit coverage to the premises or project specifically designated in the endorsement. The motive of the insurer is clear: listing premises and projects that are covered limits the exposure for a certain policy. If the insured does not choose to have all premises and business operations covered, in theory that coverage can be limited to certain locations using the designated premises endorsement.

1998 Form Language

Besides some minor formatting changes, this endorsement has basically been the same since it was first introduced in 1985. The language in the 1998 form is as follows:

Limitation of Coverage to Designated Premises or Project CG 21 44 07 98

Schedule

Premises:

Part:

(If no entry appears above, information required to complete this endorsement will be shown in the Declarations as applicable to this endorsement.)

This insurance applies only to “bodily injury”, “property damage”, “personal and advertising injury” and medical expenses arising out of:

1. The ownership, maintenance or use of the premises shown in the Schedule and operations necessary or incidental to those premises; or

2. The project shown in the Schedule.

Analysis

Until recently this policy language was effective in limiting insurer liability to bodily injury or property damage that occurred at the specific location or while working on the specific project listed in the schedule or in the declarations. In 2016 a few court cases were decided in favor of the insured that expanded the coverage area to cover incidents that were not originally intended to be covered by the policy language. The 2017 version of the form includes more strict policy language in order to prevent such a broad interpretation. Instead of lumping bodily injury and property damage, personal and advertising injury, and medical payments into one section, the revised form separates the three sections in order to provide more specific coverage.

2017 Form Revisions

Similar to the 07 98 version of the endorsement, this new revision modifies the CGL coverage part. In order to modify the coverage effectively the revision separately replaces sections of Coverage A – Personal Injury and Property Damage, Coverage B – Personal and Advertising Injury Liability, and Coverage C – Medical Payments. In order to precisely depict the differences in the revised sections, separate paragraphs were added for each Coverage A, Coverage B, and Coverage C.

The revised endorsement form may be attached to either CG 00 01, the occurrence version, or CG 00 02, the claims-made version of the CGL policy. In order to accommodate for differences between the two forms, CG 21 44 provides separate sections depicting the different coverage for the two forms.

2017 Form Language

Coverage A – Bodily Injury and Property Damage