ISO PRODUCTS/COMPLETED OPERATIONS LIABILITY COVERAGE FORMS ANALYSIS

(July 2018)

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INTRODUCTION

Insurance Services Office (ISO) CG 00 37–Products/Completed Operations Liability Coverage Form (Occurrence Basis) is analyzed first. This analysis is based on the 04 13 edition and differences between the 12 07 and the 04 13 editions will be in bold.

At the end of this article is a discussion on the differences between the CG 00 37 and the CG 00 38–Products/Completed Operations Liability Coverage Form (Claims-Made Basis).

CG 00 37–PRODUCTS/COMPLETED OPERATIONS LIABILITY COVERAGE FORM (OCCURRENCE BASIS)

CG 00 37 begins by stating that certain provisions in the form restrict coverage. It encourages the insured to carefully read the entire policy to determine its rights and duties and to determine what is covered and not covered. It also points out that the insurance company uses the terms you and your to refer to the named insured and that an insured is any person or entity qualifying as such under Section II–Who Is An Insured. The terms we, us and our refer to the insurance company providing the coverage. It also directs attention to Section V–Definitions because understanding the definitions is critical to understanding the coverage form.

SECTION I–COVERAGES-BODILY INJURY AND PROPERTY DAMAGE LIABILITY

1. Insuring Agreement

a. The insurance company agrees to pay amounts for which the insured is legally obligated to pay as damages for bodily injury and property damage covered by this insurance. This expansive statement is then limited by stating that only bodily injury and property damage that fits within the defined products-completed operations hazard is covered.

The insurance company has not only the right but also the duty to defend the insured when suits are brought that demand damages. However, this duty and right applies only when those suits apply to damages that might be covered by this insurance.

Once the insurance company is involved, it takes control and decides when and how to investigate and/or settle any claim or suit. The settlement amount is limited as described in Section III–Limits of Insurance. The duty of the insurance company to defend ends when the applicable limit of insurance is used up by actual payment of judgments and settlements.

It is very important to review the Supplementary Payment Sections in this coverage form because it lists important sums that are paid in addition to the obligations described in this insuring agreement.

b. Coverage applies to bodily injury and property damage caused by an occurrence that takes place in the coverage territory. The bodily injury and property damage must occur during the policy period.

Note: The occurrence is not required to take place during the policy period and the bodily injury and property damage are not required to take place within the coverage territory.

Example: Hedgehog Industries manufactures hedge clippers in Indiana. On 1/1/18 a box of clippers are shipped to London without having the required warning labels attached. Millicent buys one of the hedge clippers on 7/1/18. She cuts her hand with the clippers on 7/15/18 and, due to complications for the injury, dies on 8/15/18. Hedgehogs PCO policy runs from 7/1/18-7/1/19 and the next is from 7/1/19-7/1/20. If a claim is presented, the 7/1/19-7/1/20 policy would respond because the bodily injury occurred during that policy period.

Bodily injury or property damage that occurs before the policy period may be covered under the current policy period but only if no one was aware that it had occurred during a prior policy period. This means that no insured knew of the injury or damage and also that no employee authorized by the named insured to give or receive notice of an occurrence or a claim knew of it. On the other hand, when there is such knowledge, any continuation, change or resumption of that prior policy bodily injury or property damage is considered having been known before the policy period and is therefore not covered.

Note: This is only discussing the bodily injury and property damage, not the occurrence. The insured could be aware of any occurrence without any consequences. It is only knowledge of either bodily injury or property damage that impacts coverage.

c. When bodily injury or property damage occurs during the policy period all continuation, change or resumption of that particular bodily injury or property damage is covered as part of that specific policy period even if the resumption, change or continuation takes place in one or more following policy periods.

d. The policy explains exactly when bodily injury or property damage is considered to have become known. It is the earliest of the following times when any insured or employee authorized by the named insured to provide notice of a claim:

· Reports the bodily injury or property damage to any insurance company

· Receives a damage demand that alleges either bodily injury or property damage

· Becomes aware that bodily injury or property damage has occurred or has begun to occur

Note: The means by which the named insured or its authorized employee becomes aware of a loss is not limited. It could be an Internet report, an observation, or any other manner or means.

e. Bodily injury damages are not limited to only the injured party’s claims. It includes damages for care, loss of services or death resulting at any time from the claimed bodily injury submitted by any party.

2. Exclusions

The very broad coverage provided in the insuring agreement above is limited by this exclusion section. The coverage does not apply to the following:

Note: There are many exceptions within the exclusions so it is very important to read the entire exclusion in order to determine what is covered.

a. Expected or Intended Injury

Coverage does not apply to bodily injury or property damage which the insured either expected or intended. An exception to this exclusion covers bodily injury resulting from the insured using reasonable force to protect persons or property.

Note: This exclusion must be viewed from the eyes and mind of the insured not that of the witness or the person injured.

b. Contractual Liability

There is no coverage for bodily injury or property damage in cases where the insured must pay damages based on contractually assumed obligations. There are two exceptions to this exclusion.

· One is if liability would have existed without a contact or agreement. This ensures that the mere presence of a contract does not void coverage included in the coverage form.

· The second is just as simple. Coverage applies if the liability assumed is within an insured contract, as defined in the coverage form that went into effect prior to the bodily injury or property damage.

Attorney fees and other litigation expenses are considered damages, and therefore covered, but only if they were also assumed in the insured contract and then only for allegations of damages covered by this coverage form.

Note: The Supplementary Payments section of this coverage form clarifies that the defense expenses of an indemnitee are Supplementary Payments and not included in the limits of insurance under certain circumstances. However, under other circumstances, they are.

c. Liquor Liability (04 13 change)

The insurance company does not pay for bodily injury or property damage for which any insured may be liable because of any of the following:

· Causing or contributing to the intoxication of any person

· Furnishing alcoholic beverages to a person under the legal drinking age

· Furnishing alcoholic beverages to a person already under the influence of alcohol

· Any law relating to the sale, gift, distribution or use of alcoholic beverages.

The following significant changes are in the 04 13 edition:

Any of the actions described above may result in an occurrence. In that case, there is also no coverage if any of the following claims related to that occurrence are brought against the insured:

· Hiring, employing, monitoring, or training others

· Noting that a person is intoxicated and either providing transportation to that person or failing to provide such transportation

This exclusion does not apply if the named insured is not in the business of manufacturing, distributing, selling, serving, or furnishing alcoholic beverages.

The named insured may not serve alcoholic beverages but does allow others to bring such beverages onto its premises. In that case, this exclusion does not apply even if a license is required to operate this way. It is not treated as a liquor-related business even if it charges a fee to consume the beverages on the premises.

This could be a very important exclusion for online or mail order sellers of alcoholic beverages because of the difficulty of verifying the legal age and identity of prospective purchasers. In cases such as these, the named insured should purchase Liquor Liability Coverage.

d. Workers Compensation and Similar Laws

There is no coverage for requirements or obligations of the insured imposed by any workers compensation, disability benefits, unemployment compensation or similar law. The intent of this exclusion and the Employers Liability exclusion is to eliminate the possibility of the insured being indemnified under this coverage form for an injury covered by workers compensation or employer’s liability coverage forms and policies.

e. Employers Liability

Bodily injury to an employee of the insured as a result of his or her employment by the insured is not covered. Such injury to an employee during performance of duties that are in conjunction with the conduct of the insured’s business is also excluded. Bodily injury to the spouse, children, parents, brothers or sisters of that employee that occurs because of the bodily injury of the employee is also not covered.

This exclusion applies whether the insured is liable as an employer or in any other capacity, or whether the insured must share damages with or repay someone else who must pay damages because of the injury.

An important exception to this exclusion is that it does not apply to liability the insured assumes under an insured contract.

Note: This clarification is particularly important because of the widespread use of contractors, subcontractors, independent contractors or leased employees and much of the uncertainty with respect to who is responsible for injuries to those workers.

f. War

There is no coverage for bodily injury or property damage caused directly or indirectly in any way by war, undeclared war and civil war. There is also no coverage if the injury or damage is from warlike action by a military force. This exclusion also applies to actions taken by a government to prevent or defend against an expected or actual attack by any government or other authority using military personnel or agents. It also applies to rebellion, revolution, insurrection or unlawful seizure of power and the action taken by the government to prevent or defend against any of these.

g. Damage to Property

The insurance company does not pay for property damage to:

(1) Property the named insured owns, rents or occupies. Costs or expenses the named insured or any other party incurs to repair, replace, enhance, restore or maintain such property for any reason are not covered even if they are incurred in order to prevent injury to persons or damage to property of others.

(2) Premises the named insured sold gave away or abandoned. This exclusion applies when the property damage arises out of any part of those premises

(3) Property loaned to the named insured

(4) Personal property in the insured's care, custody or control

There are two exceptions:

· Paragraph (2) above does not apply if the location is the named insured's work and the named insured never occupied or rented the location or held it for rent.

Note: This is particularly important to homebuilders that build and sell homes. Without this exception, there would be no coverage once the home was sold. However, this exclusion does apply if the named insured used the home as an office or rented it out prior to selling it.


Coverage applies because it is a model home and never rented or occupied.	Coverage does not apply because it has been occupied as an office.

· Paragraphs (3) and (4) above do not apply to any liability assumed under a sidetrack agreement.

Note: Railroad sidetrack agreements are covered contracts under the PCO Coverage Form.

h. Damage to Your Product

Coverage does not apply to property damage to the named insured's product arising out of it or any part of it.

Example: The named insured manufactures gas water heaters. A water heater malfunctions, explodes and destroys the furnace next to it and other items in the utility room. Coverage does not apply to the destroyed water heater but it but would apply to the furnace and other property damaged by the explosion.

i. Damage to Your Work

There is no coverage for property damage to the named insured's work that arises out of it or any part of it included in the products/completed operations hazard.

There is an exception to this exclusion that applies to work performed by a subcontractor that the insured hired. Coverage applies if the damage to property is the result of the subcontractor’s completed work.

Example: The named insured is building a house. The electrical wiring in the house causes a fire. The property damage as a result of the fire is not covered. However, coverage does apply if a subcontractor installed the wiring for the named insured.

Related Court Cases:

Work Product Exclusion in Contractor's Liability Insurance Held Applicable To Claim for Negligent Location Of House

Work Project Exclusion Held Applicable to Control of Project by Construction Manager

j. Damage to Impaired Property or Property Not Physically Injured

If a defect, inadequacy or dangerous condition in the named insured’s work or product impairs property but does not physically damage it, there is no coverage. There is also no coverage when the named insured or its subcontractor either is late in fulfilling or fails to perform items required in its contract, and that lack of action results in property being impaired. However, this exclusion does not apply to loss of use of other property arising out of the sudden and accidental physical injury to the named insured completed work or product.

Example: Peckin Switch, Inc. manufactures assembly line switches. Peckin sold a batch of defective switches to be installed as replacements during routine assembly line maintenance. After the switches were installed, the assembly lines could not be restarted, resulting in additional downtime. Assembly lines were impaired because of Peckin’s defective switches but were otherwise undamaged. All claims made against Peckin are excluded.

Note: There is no standard ISO endorsement currently available to buy back this coverage or to delete this exclusion.

k. Recall of Products, Work or Impaired Property

There is no coverage for any incurred loss, cost, or expense when the named insured’s product, work, or any impaired property is recalled or withdrawn from the market or from any use. There is also no coverage for costs and expenses the named insured or others incur because they can no longer use the recalled or withdrawn item. This exclusion also applies to withdrawal, recall, inspection, repair, replacement, adjustment, removal, and disposal expenses.

This exclusion applies when the recall or withdrawal is due to a defect, deficiency, inadequacy, or dangerous condition in the item recalled.

Note: CG 00 66–Product Withdrawal Coverage Form reimburses the named insured's product withdrawal expenses because of a product withdrawal to which the coverage provided applies.

l. Electronic Data (04 13 change)

Coverage does not apply to damages arising out of the loss of, loss of use of, damage to, corruption of, inability to access or inability to manipulate electronic data.

This exclusion does not apply to bodily injury. (04 13 addition)

Electronic data is defined as information, facts or programs used with computer software or any other media used with electronically controlled equipment.

SUPPLEMENTARY PAYMENTS

Note: Payments made under this section do not reduce the limits of insurance.

1. Only when the insurance company investigates or settles a claim or defends a suit against an insured, will the insurance company pay the following amounts.

a. All expenses incurred that relate to the claim.

Note: This provision is important because these expenses can be substantial and could reduce the available limits if they were included in the limits of insurance that apply.

b. The cost of bonds to release attachments. This is limited to only the cost of bond amounts that are within the limit of insurance that applies. The cost of the excess amount of the bond is at the insured’s expense. The insurance company is not required to furnish the bonds.

c. Reasonable expenses the insured incurs at the request of the insurance company to assist it in investigating or defending a claim or suit. This includes up to $250 per day in lost earnings if the insured is required to be away from work.

d. A suit’s court costs that are the insured’s responsibility. These costs do not include attorney fees or expenses for which the insured is responsible.

Note: This attorney’s fee restriction can be very costly to the insured, especially if the insured loses the law suit and the court assesses the other party’s attorney’s fees against the insured.

e. Prejudgment interest, for which the insured is responsible, on the part of any judgment the insurance company pays. However, if the company offers to pay full policy limits, it does not pay any prejudgment interest that accrues during the period of time after it makes the offer.

f. Interest that accrues on the full amount of any judgment in the period between the entering of the judgement and the insurance company paying, offering to pay or depositing with the court its portion of that judgment.

2. If an indemnitee of the insured is named in a suit brought against the insured and the insurance company defends the insured, the company will also defend the indemnitee but only if the following conditions are met:

a. The suit against the indemnitee must meet the following two criteria:

The damages it seeks must be for liability of the indemnitee that is assumed by the insured
The liability must have been assumed by the insured in a contract or agreement

b. The insurance provided by this coverage form must apply to the assumed liability

c. The insured assumed the obligation to defend or the cost of defense in the same contract or agreement where the liability was assumed

d. Based on what the insurance company knows about the occurrence and the allegations contained in the suit, there appears to be no conflict between the respective interests of the insured and the indemnitee

e. Both the insured and the indemnitee ask the insurance company to handle the defense of the indemnitee in the suit and agree to have the same legal representative handling the interests of both parties

f. The indemnitee has its own set of conditions. The following must be in writing:

· Agree to cooperate with the insurance company while they investigate, defend or settle the suit.

· An agreement to immediately send copies to the insurance company of suit-related demands, notices, summonses or legal documents.

· Agree to provide notification to any other insurer who provides coverage for the indemnitee.

· A cooperation agreement with the insurance company as it coordinates other insurance available to the indemnitee.

· Provide authorization so that the insurance company can obtain records and other information related to the suit.

· Authorize the insurance company to conduct and control the defense of the indemnitee in the suit.

Subject to all criteria in this item 2. being met, attorney fees and all litigation expenses are paid without reducing the limits of insurance. The insurance company's obligation to defend the indemnitee ends when the applicable limit of insurance is exhausted by payment of judgments or settlements or when the conditions and agreements in this item 2. above are not met.

Example: Gregory manufactures tea pots. Endorsement CG 20 15–Additional Insured Vendors is attached so all of Gregory’s vendors are considered additional insureds for Gregory’s tea pots. Marge is badly burnt when the handle of her tea pot, which had been purchased from Cozy Tea, breaks. She sues Cozy Tea and Gregory. Gregory’s insurance coverage agrees to represent both Cozy Tea and Gregory and pay all defense expenses. However, Cozy Tea is not satisfied with the handling of the case and refuses to honor the conditions as outlined. Cozy Tea’s owner demands separate representation because she believes her case is being compromised by being tied to Gregory. Once this occurs, her defense costs are no longer outside limits. The case continues and Cozy Tea has separate representation, but all expenses incurred reduce the limit of insurance available to pay for the loss.

SECTION II–WHO IS AN INSURED

1. This section identifies insureds with respect to this insurance. This applies based on the type of entity or entities selected on the declarations:

a. If the named insured is an individual, the individual is the named insured as well as the named insured's spouse. However, this situation is not all-inclusive. Their status as named insureds is limited to operations of the business for which the named insured is the sole owner.

Example: Katie Fram, a sole proprietor, sells bird houses. Both she and her husband, Patrick, are insureds. In addition, Katie is the sole proprietor in another venture in which she sells birdseed. Here again, both she and Patrick are insureds. However, if she and her sister owned the birdseed business as a partnership, coverage would not apply to the partnership.

b. If the named insured is a partnership or joint venture, the partnership or joint venture is an insured. In addition, the members and partners of the named insured along with their spouses are insureds but subject to a condition. The condition is that their status as insureds is limited to operations of the named insured's business.

Example: Jasper and Milo are partners in a mining business. Both partners and their spouses are insureds with respect to conduct of their mine. However, none of them are insureds under this coverage form for any personal exposures or for any other business activities.

c. If the named insured is a limited liability company, the limited liability company is an insured. In addition, members of the company are insureds but their status is limited to their conducting the named insured's business. The named insured's managers are also insureds but their limited status is only while performing their specific duties as managers.

d. If the named insured is any other organization, it is an insured. In addition, the executive officers and directors are insureds but the insured status is limited to their performance of their duties as officer or directors. Stockholders are also insureds but their status is very limited to only liability imposed as stockholders.

2. The following are also insureds:

a. Employees, excluding executive officers and managers of a limited liability company, are insureds within the narrow range of activities within the scope of their employment or while conducting the named insured's business.

(1) Employees are not insureds for bodily injury:

· To the named insured, its partners or members.

· To other employees. However, this limitation applies only while the other employees are in the course of their employment or performance of duties related to the conduct of the named insured's business

· To a relative of any co-employee as a consequence of the paragraph above

· Where an obligation exists to share damages with or repay others for damages because of injury described in the two bulleted items above

· When an employee provides or fails to provide professional health care services

(2) Employees are also not insureds for property damage to property owned, occupied, used by, and rented to, in the care, custody or control of any of the following:

· The named insured

· Employees of the named insured

· Partners or members of the named insured.

This property damage restriction also extends to property over which any of the above exercise physical control.

b. Any party other than an employee acting as the named insured's real estate manager.

c. If the named insured dies, the temporary legal custodian of the named insured’s property. This status applies only until a legal representative is appointed. The status is limited to only the liability resulting from maintenance of the property.

d. If the insured dies, the properly appointed legal representative but only while carrying out its duties as the legal representative.

Note: The legal representative assumes all of the deceased named insured's rights and duties. This goes beyond the standard insured status and extends to rights to cancellation, conditions and other elements assigned only to named insureds.

3. Any newly formed or acquired organization qualifies as a named insured if no other similar coverage is available to it. This does not include partnerships, joint ventures or limited liability companies the named insured owns or over which it has majority interest. This provision applies for only 90 days after the organization is formed or acquired, or until the end of the policy period, whichever comes first. In addition, coverage does not apply to bodily injury or property damage that occurred before acquisition or formation of the organization.

No party is an insured concerning conduct of any current or previous partnership, joint venture or limited liability company not shown on the declarations as an insured.

Note: In addition to the parties included as insureds as outlined above, ISO has produced numerous endorsements used to add a variety of additional insureds under certain circumstances or limited to specific purposes.

SECTION III–LIMITS OF INSURANCE

1. The most the insurance company pays are the Limits of Insurance on the declarations, subject to the rest of this section. This is regardless of the number of insureds, claims made or suits brought and number of parties making claims or bringing suits.

Example: Parrott and Keet are partners in the Birds R Us pet store. Keri is attacked by a purchased parrot and sues Parrott and Keet individually as well as the Birds R Us partnership. Although there are three claims presented, only one occurrence limit will be available for the loss.

2. The Aggregate Limit is the most paid for damages because of bodily injury and property damage included in the products/completed operations hazard.

Example: Listening Ears, Inc.’s Products/Completed Operations Liability Coverage Form has a $3,000,000 aggregate limit. Ten products claims for ten separate customer injury claims are presented during a single policy year. All the losses are covered, the injuries occur during the policy period, and the total amount of the ten claims is $4,000,000. This coverage form responds only up to the $3,000,000 aggregate limit.

3. The Each Occurrence Limit is the most paid for the total of damages arising out of a single occurrence. This is subject to the Aggregate Limit.

The final part of this section clarifies how the limits of insurance apply in a policy period. They apply separately to each consecutive annual period and to any remaining period of less than 12 months. The period begins with the coverage inception date on the declarations. A policy period may be extended for an additional period of less than 12 months. When that occurs the additional extended period is treated as part of the last preceding period for the purpose of determining the limits of insurance.

Example: Purple Punch’s policy has a policy inception date of 1/1/18. A decision is made to rewrite all policies in order to gain a common expiration date of 7/1. Purple Punch can either cancel on 7/1/18 and have a new policy on that date or extend the existing policy to 7/1/19. Unless there is a reduction in coverage because of a policy edition change, Purple should be advised to replace the policy on 7/1/18.
Option 1:	Limits	Option 2:	Limits
1/1/18 – 7/1/18	$1,000,000	1/1/18-7/1/19	$1,000,000
7/1/18-7/1/19	$1,000,000
Using option one, Purple Punch would have a unique $1,000,000 aggregate available for the first six months of coverage and then a separate $1,000,000 available for the next 12-month policy period.		In option two, Purple Punch would have only $1,000,000 aggregate for the entire 18 months.

SECTION IV–PRODUCTS/COMPLETED OPERATIONS LIABILITY CONDITIONS

1. Bankruptcy

If the insured or the insured's estate becomes bankrupt or insolvent, the insurance company is not relieved of its obligations under the Products/Completed Operations Coverage Form.

2. Duties in the Event of Occurrence, Claim or Suit

The named insured has a number of duties to perform when a situation that might result in a claim occurs and also if a claim or demand for coverage is presented:

a. The named insured must inform the insurance company when there is an occurrence that may result in a claim or demand. The notice must be as soon as practicable and provide information concerning how, when and where the event took place. The notice should also include the names and addresses of all injured parties and any witnesses along with a description of the nature and location of any injury or damage that are a result of the occurrence.

b. Concerning claims made or suits brought, the named insured must immediately record the details of the claim or suit and the date on which it was received. The insurance company must be notified of the claim or suit as soon as practicable. A verbal notification is not sufficient. It must be followed up by timely written notice.

c. Every insured involved in or with the claim must:

· Provide copies of demands, notices, summonses and legal documents received in conjunction with the claim or suit immediately to the insurance company

· Authorize and grant approval for the insurance company to obtain records and other needed information

· Cooperate with the insurance company as it investigates and/or settles the claim or defends the suit

· Only when requested by the insurance company, assist it in enforcing rights against a person or organization that may be liable to the insured for injury or damage covered by this insurance

d. No insured may voluntarily make any payments, assume any obligations or incur any expenses other than first aid without the insurance company's consent. The insured does have permission to do any of the above but only at its own cost or expense.

Related Court Case: Ten Year Delay of Claim Relieved Insurer of Defense and Indemnification of Housing Authority is an example of the potential impact of improperly notifying the insurance company of a claim.

3. Legal Action Against Us

No party has the right to join the insurance company in any manner, bring the company into a suit claiming damages from an insured or sue the insurance company unless all of the policy terms and conditions have been completely met and complied with.

The insurance company can be sued to recover on an agreed settlement or on a final judgment against the insured. However, the insurance company is not liable for damages that would not be covered by this coverage form. It is also not liable for amounts in excess of the limit of insurance.

The term “agreed settlement” is a settlement where a release of liability is signed by the insured, the insurance company and the claimant or the claimant's legal representative. This settlement would have been reached out of court.

4. Other Insurance

The insurance company's obligations to pay are limited if other valid and collectible insurance is available that applies to the loss, as follows:

a. Primary Insurance

The insurance provided under this coverage form is primary. The insurance company has the first obligation to pay unless any other insurance available is also primary. When there is other primary coverage, refer to b. Method of Sharing, below.

b. Method of Sharing

Equal sharing is the preferred method but it is used only if all of the other primary coverage forms permit it. Equal shares contribution means that each insurance company contributes an equal amount until it uses up its limit of insurance or the loss is paid, whichever occurs first.

Example: The insured has three separate Products/Completed Operations Liability Coverage Forms, all written in the same name. When a loss occurs for which the insured is liable for damages, all three respond. Policy A's each occurrence limit is $1,000,000, Policy B's is $2,000,000 and Policy C's is $3,000,000. The total amount of the judgment for which the insured is liable is $300,000. Under contribution by equal shares, each of the three policies contributes $100,000 for a total payment of $300,000.

Contribution by proportional limits is used when equal sharing cannot be used. Proportional limits contribution requires the development of a ratio which is then applied to the loss. Ratios are determined based on each insurer’s limit as a percentage of the total applicable limits. The loss is then multiplied by the computed ratio to determine how much each company must pay.

Example: Using the previous example, Policy A's each occurrence limit is $1,000,000, Policy B's is $2,000,000 and Policy C's is $3,000,000. The total of all limits available to pay claims is $6,000,000. Company A has 1/6 of the obligation. Company B has 1/3 of the obligation. Company C has 1/2. The total amount of the insured's liability is $300,000. As a result, Company A pays $50,000, Company B pays $100,000, and Company C pays the remaining $150,000.

5. Premium Audit

a. All premiums are calculated according to the insurance company's rules and rates.

b. The premium shown on the declarations as an advance premium is only a deposit premium. At the end of each audit period, the insurance company determines the actual earned premium for the period and notifies the first named insured. The due date for the company to receive the premium billed is the due date shown on the billing notice. However, when advance and other premiums paid throughout the policy year are more than the computed premium, the insurance company refunds the excess to the first named insured.

c. The first named insured is required to keep the records and information the insurance company needs to do the premium calculations. It must send copies of such records and information to the company when requested to do so.

Example: Fernando’s Meats policy is issued effective 1/1/18 as follows:
Rate:	Sales	Advance premium
1.25	$2,000,000	$2,500
Fernando provides his records to the insurance company in February, 2019 and his premium is calculated as follows:
Rate:	Sales	Earned premium
1.25	$3,000,000	$3,750
Fernando is sent a bill for $1,250 ($3,750 - $2,500). The bill is due upon receipt.

6. Representations

When the named insured accepts this coverage form as issued, it agrees that the statements on the declarations are complete and accurate. It also agrees that the policy is based on representations it made to the insurance company. Furthermore, the named insured agrees that the policy was issued based on those representations.

Note: This condition is important because it sets the stage for rescission of the policy if it is determined that the named insured misrepresented material information.

Related Court Cases:

Contractor Paints Itself into a Corner

Split Decision on False Statements in Application

7. Separation of Insureds

Each named insured is treated as though it is the only named insured. There are two exceptions. The first is that limits of insurance apply over the entire coverage form so each named insured does not have access to its own set of limits. The other exception is that the first named insured has certain extra policy-related responsibilities which are described within the applicable conditions.

When insureds are faced with a claim or suit, each one is treated separately. The only exception is that the limits of insurance apply over the entire form so each insured does not have its own set of limits.

8. Transfer of Rights of Recovery Against Others to Us

Any rights the insured has against others to recover all or part of any payment made by the insurance company are transferred to the insurance company. The insured must preserve those rights and do nothing after the loss occurs to impair them. The insurance company can request that the insured bring suit or transfer those rights to it. The insurance company also has the right to request that the insured assist it in enforcing those rights.

Note: The enforcement can be very difficult on insureds as they may be required to be the party to any lawsuits filed which can result in lost friendships and adverse publicity.

Example: Marty’s Jewels, Inc. manufactures and sells earrings to a number of local retailers. All necklaces are required to be hypoallergenic. Paula sues Gina’s Jewels because she had a severe allergic reaction to an earring. Gina’s insurance company, Heartly Insurance, files a claim against Marty’s Jewel’s, Inc. because it manufactured the contaminated earring. Marty’s insurance carrier, Friendly Insurance, pays the retailer’s claim and then uses Marty’s rights of recovery to subrogate against Precise Metals who had supplied the contaminated metal used in the earrings. Marty is devastated when his close friend, the owner of Precise Metals, is forced into bankruptcy due to the lawsuit.

9. When We Do Not Renew

The insurance company must mail or deliver written notice if a decision is made to not renew. The notice must be mailed to the first named insured at the address listed on the declaration. The notice must be mailed at least 30 days prior to the expiration date. The only evidence required that the notice has been mailed out is a proof of mailing.

Note: This paragraph is modified by specific endorsements in many states as to the number of days of advance notice of non-renewal required, what is considered acceptable as proof of mailing and the valid reasons to terminate or not renew coverage. The requirements of each state must be evaluated carefully when considering any changes or modifications of this condition.

SECTION V–DEFINITIONS

Defined words are used throughout the policy. Restricting their meaning to the definition in the policy provides the means for all parties involved with the policy to have a clearer understanding of the coverage intended.

1. Auto (04 13 change)

A land motor vehicle, trailer or semi-trailer designed for travel on public roads. Machinery and equipment attached to that land motor vehicle, trailer or semi-trailer is also considered auto. A land vehicle that is subject to compulsory or financial responsibility laws or motor vehicle laws where it is garaged is also considered an auto.

The term does not include mobile equipment.

Note: The 04 13 edition removes the words “in the state” after “motor vehicle laws” in the prior edition with respect to auto licensing or garaging locations.

2. Bodily injury

Sickness or disease when it is sustained by a person is considered bodily injury. Bodily injury that is sustained by a person is also bodily injury.

Death that results from bodily injury, sickness or disease is bodily injury no matter when that death results.

Example: A machine exploded. Jerry was struck by one of the flying parts. It lodged in his head and could not safely be removed. Many years later he fell off a ladder, dislodged the part and died. Even though the death was many years after the initial injury, the death is considered bodily injury from that initial bodily injury.

3. Coverage territory

The United States of America, its territories and possessions, Puerto Rico, and Canada. International waters or airspace are also part of the coverage territory but only for injury or damage that occurs during travel or transportation between points in the first sentence.

Coverage territory includes other parts of the world, if the injury or damage arises out of the goods or products the named insured manufactures or sells in the territory described above. However, this worldwide coverage is limited because payment is made only when the damages are determined either by trial in the territory described above or in a settlement agreed upon with the insurance company.

4. Employee

This expands to include leased workers but not to temporary workers.

5. Executive officer

A person occupying any officer position. The named insured's charter, constitution, by-laws or similar governing documents are the only documents that can describe what an officer position is.

6. Impaired property

Tangible property that either cannot be used or is less useful than it could be. It cannot be the insured’s work or product.

The reason for the loss of usefulness can be because the named insured's product or work that is a part of the tangible property is dangerous , inadequate, defective or deficient or is alleged to be so.

Example: Jerry’s stamping machine was working well but a recent recall notice states that any machine with a Ready Start switch could accidentally activate. Jerry takes the machine out of service until the replacement switch is delivered. That machine is impaired property.

The reason for the loss of usefulness can also be the result of the named insured not satisfactorily completing the terms of a contract or agreement.

Example: Gordon Millwrights have installed a luggage carrousel at the local airport. All work is complete but the carrousel cannot be used until all safety testing has been completed. The time period between the final installation and the safety inspection is when the carrousel is impaired property.

An important part of this definition is that the property must be capable of being restored to use.

7. Insured contract

Consists of six types of documents:

a. Lease of premises. This does not include a part of any agreement that indemnifies others for fire to a premises that is either rented to or occupied temporarily by the named insured with the owner’s permission.

b. Sidetrack agreement

Note: A sidetrack agreement is a contract between the owners of a premises and a railroad with respect to a railroad transfer or access track on the insured property owner's premises. The railroad agrees to let the insured use the sidetrack as long as the railroad is guaranteed access to it and the owner agrees to certain conditions concerning maintenance of the property. These agreements may also contain specific hold harmless agreements between the property owner and the railroad.

c. An easement or license agreement. However, those contracts connected with construction or demolition operations on or within 50 feet of a railroad are not insured contracts.

d. Obligations to indemnify a municipality as required by ordinance. However, those connected with actual work for that municipality are not insured contracts.

e. Elevator maintenance agreements

f. A business-related contract or agreement in which the named insured assumes the tort liability of another party and under which it must be pay for bodily injury or property damage to a third person or organization. Contracts or agreements that indemnify a municipality in conjunction with work done for the municipality are included within this type of contract. However, the following contracts and agreements in part or in whole are not insured contracts:

· Ones that indemnify a railroad for bodily injury or property damage but only for such injury or damage that is due to construction or demolition operations conducted within 50 feet of any railroad property. That property must have to do with railroad bridges, trestles, tracks, roadbeds, tunnels, overpasses or crossings

· Ones that indemnify architects, engineers or surveyors for injury or damage. The primary cause of the injury or damage must arise from the preparation, map approval process, shop drawings, opinions, reports, surveys, field orders, change orders, drawings and specifications, or the giving or failure to give instructions or directions.

· When an architect, engineer or surveyor insured assumes liability for injury or damage arising out of its rendering or failing to render professional services as described in the above paragraph or from supervisory, inspection, architectural or engineering activities

Note: Tort liability is liability imposed by law.

8. Leased worker

A person leased to the named insured by a labor-leasing firm. There must be a written contract or agreement between the named insured and the labor-leasing firm. The leased worker performs duties related to the conduct of the named insured's business. Leased workers are not the same as temporary workers.

9. Loading or unloading

The handling of property. It starts when the property is moved from a place of acceptance onto an aircraft, watercraft or auto. It continues while it is on the aircraft, watercraft or auto and does not end until the property is at its final delivery location. Movement of property by means of a mechanical device not attached to the aircraft, watercraft or auto is not considered loading and unloaded unless the device is a hand truck.

10. Mobile equipment

The following land vehicles and the machinery attached to them.

a. Bulldozers, farm machinery, forklifts, and other vehicles designed primarily for off-road use

b. Vehicles intended to be used only on or next to the owned or rented premises

c. Vehicles that use crawler treads to travel

d. Vehicles used to provide mobility for the described permanently mounted equipment. The equipment must be power cranes, shovels, loaders, diggers or drills, or road construction or resurfacing equipment such as graders, scrapers, or rollers. The vehicle is not required to be self-propelled but it may be.

e. Vehicles not described in a., b., c., or d. above and that are not self-propelled. They must be used to provide mobility for permanently attached equipment. The equipment can be devices used to raise or lower workers, such as cherry pickers. It can also be air compressors, pumps, and generators, including spraying, welding, building cleaning, geophysical exploration, lighting, and well servicing equipment.

f. Vehicles not described in a., b., c., or d. above and used for purposes other than transporting persons or cargo.

Vehicles that are self-propelled with the following permanently attached equipment are autos, not mobile equipment:

Any item designed to remove snow, maintain roads (other than to construct or resurface them), or to clean streets
Any items mounted on automobile or truck chassis and used to raise or lower workers or equipment, such as cherry pickers
Air compressors, pumps, and generators, including spraying, welding, building cleaning, geophysical exploration, lighting, and well servicing equipment

Mobile equipment does not include any vehicle subject to compulsory or financial responsibility laws or motor vehicle insurance laws where it is licensed or garaged. These vehicles are treated as autos. The 04 13 edition removes the words “in the state” after “motor vehicle laws” in the prior edition with respect to auto licensing or garaging locations.

11. Occurrence

An accident. It includes continuous or repeated exposure to essentially the same harmful conditions.

12. Products/completed operations hazard

Bodily injury and property damage that occurs away from premises or locations the named insured owns or rents and arising out of its products or work. It does not mean:

Products that remain in the named insured's physical possession
Work not considered either completed or abandoned.

Work is considered completed when the work called for in the named insured’s contract has been completed. When there is a contract for work at multiple sites, the work at one site is considered completed even if there is still work to be done at other sites. Whenever part of work done at a site is put to its intended use by any party, other than a contractor or subcontractor still working on the same project, that part of the work is considered complete. Work is considered completed, even if it may still need service, maintenance, correction, repair, or replacement.

This definition does not include bodily injury or property damage that arises from any of the following:

Transporting property. However, coverage applies if a condition in or on a vehicle not owned or operated by any insured created by loading or unloading that vehicle by any insured causes the injury or damage.

Example: Massive Art Supplies hires Good Hauls, Inc. to transport various paints to its clients from Indiana to California. The product arrives and is sold at local outlets. Artists buy the paints and notice the paint does not adhere or have true color resulting in multiple claims because of work having to be redone. An investigation reveals that Good Hauls, Inc. neglected to activate its refrigerating unit during the long trip. Massive Art Supplies is covered for the products losses because of the exception to this definition.

The existence of tools, uninstalled equipment, or abandoned or unused materials

Products or operations with a classification on the declarations or a schedule that states that the products-completed operations is subject to the General Aggregate Limit

13. Property damage

Physical injury to tangible property. The resulting loss of use of that property is included in the physical injury loss. It is treated as having occurred at the same time as the physical injury that caused it.
Loss of use of tangible property not physically injured is also property damage. The loss of use is treated as having occurred at the time of the particular occurrence that caused it.

Electronic date is not considered tangible property. Electronic data is information, facts or programs stored as or on, created or used on or transmitted to or from computer software or any other media used with electronically controlled equipment.

Note: This is extremely important and limiting! Its importance cannot be overemphasized. If the named insured passes a computer virus to another party's computer in any way, and that virus destroys important data on that computer, previous editions might have covered it. That is no longer the case with this definition.

14. Suit

A civil proceeding alleging damages resulting from bodily injury or property damage covered by this insurance. Arbitration proceedings or any other alternative dispute resolution proceeding in which such damages are claimed are considered suit only if submitted to by the insured with the insurance company's consent.

15. Temporary worker

Any person furnished to the named insured as a substitute for a permanent employee who is temporarily away from the business. Also a person furnished to meet seasonal or short-term workload conditions.

16. Your product

Any goods or products manufactured, sold, handled, distributed or disposed of by the named insured, by others that trade under the named insured’s name, or by any party whose business or assets the named insured acquired. Your Product includes containers (excluding vehicles), materials, parts, or equipment furnished in connection with such goods or products.

Your product does not include real property.

Your product is also warranties or representations made concerning the fitness, quality, durability, performance, or use of the product and providing (or failing to provide) adequate warnings or instructions.

Your product is not vending machines or other property rented to or located for the use of others but not sold.

17. Your work

Work or operations done by the named insured or on behalf of the named insured, and the materials, parts or equipment furnished in connection with such work or operations.

Warranties or representations made at any time concerning the fitness, quality, durability, performance or use of the named insured's work are considered your work. The providing or failing to provide warnings or instructions is also considered your work.

CG 00 39–PRODUCTS/COMPLETED OPERATIONS LIABILITY COVERAGE FORM–CLAIMS-MADE BASIS

The header section of this coverage form states in bold letters that Coverage A and Coverage B provide claims-made coverage with the admonition to read the entire form carefully. This statement is intended to alert the named insured to the fact that certain parts of this coverage form are different than in the occurrence coverage form.

This analysis addresses only the five parts of the claims-made form that differ from the occurrence form.

Section I–Coverage–Bodily Injury and Property Damage Insuring Agreement
Section IV–Products/Completed Operations Liability Conditions (Duties In The Event Of Occurrence, Claim Or Suit)
Section IV–Products/Completed Operations Liability Conditions (Other Insurance–Excess Insurance)
Section IV–Products/Completed Operations Liability Conditions (Your Right To Claim And Occurrence Information)
Section V–Extended Reporting Periods

Note: The WHO, WHAT, WHERE, and HOW aspects of coverage are unchanged. The differences are based on WHEN.

COVERAGE

1. Insuring Agreement summary:

The differences between the two forms in subparagraph b. are the reasons there are two CGL forms. All other differences emanate from this subparagraph. In item b. (2) in the CG 00 37 the bodily injury or property damage must actually happen during the policy period. In the CG 00 38 the bodily injury or property damage must happen after the retroactive date but before the end of the policy period. The importance here is that if the retroactive date is five years prior to inception, there are six years in which bodily injury or property damage might have happened and that could be covered by the form. Under the CG 00 37, the bodily injury or property damage must happen within the policy period.
In paragraph b.(3) a limitation is imposed in the CG 00 38. The first claim for damages must be presented during the policy term or during the police’s extended reporting period. Paragraph c. explains how important the first notice of claim is. That first notice sets the date for all claims that relate to the first claims.
CG 00 37 does not discuss when claims are made because that does not impact its coverage. However, paragraphs b. (3), c, d. and e. are required to explain exactly when an insured has knowledge of bodily injury or property damage. The policy in which that knowledge is first gained is the only policy that will respond to any and all claims related to the bodily injury or property damage.

Example: The policy period is 01/01/18 to 01/01/19 when coverage is written on a claims-made basis for the first time. It subsequently renews twice, each time on a claims-made form. Three claims are reported during the time period. Claim #1 is a 12/01/017 bodily injury reported on 01/15/18. Claim #2 is a 05/01/18 property damage reported on 12/01/18. Claim #3 is a 02/01/18 bodily injury reported on 06/01/16.

Scenario 1: The retroactive date changes to match the effective date of each policy term:

Claim #1 is denied because the bodily injury date was before the retroactive date. Because the previous coverage was written on an occurrence basis, that coverage form should respond.
Claim #2 is considered because both the property damage date and the date the claim was reported are in the same year.
Claim #3 is denied because the bodily injury date was during the first policy term but the claim was not reported until the second policy term and the retroactive date was moved to match the second policy term inception date.

Scenario 2: The retroactive date is the effective date of the first claims-made policy.

Claim #1 is denied because the bodily injury date was before the retroactive date. Because the previous coverage was written on an occurrence basis, that coverage form should respond.
Claim #2 is considered because both the property damage date and the date the claim was reported are in the same year.
Claim #3 is considered because the bodily injury date is after the retroactive date of the second policy and the claim was reported during the second policy term.

Scenario 3: The retroactive date indicated on the declarations is "None."

Claim #1 is considered because the claim is made in the first policy term. However, it is handled as excess over the occurrence coverage form in effect at the time of the occurrence.
Claim #2 is considered because there is no retroactive date and the date the claim was reported is in the first policy term.
Claim #3 is considered because there is no retroactive date and the date the claim was reported is in the second policy term.

All claims for damages because of bodily injury to the same person are treated as having been made at the time that the first of those claims was made against any insured.

Example: Brian is unloading a semitrailer when the lift on the truck malfunctions and crushes his foot. A claim for his medical bills is presented to Sims Truck Lifts, Inc. on 07/01/17. Brian’s wife sends notification of her claim for loss of consortium to Sims’ insurance company. On 03/01/18, Brian dies due to complications from the foot surgery so his family files a wrongful death claim against Sims. On 09/01/18, Brian’s workers compensation carrier subrogates against the insured for the costs of the injuries he sustained that it paid. Each of these claims is treated as having the initial claims-made date of 07/01/17.

All claims for damages because of property damage causing loss to the same person or organization are treated as having been made at the time that the first of those claims was made against any insured.

SECTION IV–PRODUCTS/COMPLETED OPERATIONS LIABILITY CONDITIONS

The CG 00 38, Condition 2. Duties In The Event Of Occurrence, Claim or Suit, subparagraph a. has an entry not found in the occurrence form. It states that notice of an occurrence is not notice of a claim. Subparagraph b. in the CG 00 38 states that if a claim is received by any insured, the named insured must immediately record the specifics of the claim and the date received and notify the insurance company as soon as practicable. The named insured must also ensure that the insurance company receives written notice of the claim as soon as practicable.

Note: The term suit does not appear in the claims-made form.

Example: On 08/01/17, Pamela witnesses one of her restaurant’s customers choking on her food and expressing concerns about her food allergies. After the customer’s breathing improves, Pamela questions her cook about the ingredients in that customer’s meal. Meanwhile, the customer and the rest of the table leave. Pamela notifies the insurance company of the occurrence on the same day. On 06/15/18 Pamela receives papers informing her that the family of the customer is suing because she died as a result of the food she ingested at the restaurant.

If Pam had claims-made coverage in force during the time period, the claims-made date is 06/15/18, not 08/01/17, and the coverage in force as of 06/15/18 responds, provided the retroactive date is prior to 08/01/17.

Condition 4. Other Insurance, subparagraph b. Excess Insurance is an addition. The occurrence form coverage is always primary so there is no excess provision. This excess provision states that this insurance is excess over any other insurance that is not written as claims-made. That other insurance must be effective prior to the inception date of this policy and apply to bodily injury or property damage. Furthermore, this policy is excess only if either of the following is true:

A retroactive date is not shown on the declarations of this insurance
When there is a retroactive date on this policy, the policy period of the other insurance must continue beyond that date.

Example: Continuing the restaurant example above, if occurrence coverage was in effect on 08/01/17 and claims-made coverage was in effect on 06/15/18 with a retroactive date prior to 08/01/14, the occurrence coverage is primary and the claims-made coverage is excess.

Condition 10. Your Right to Claim and Occurrence Information in the CG 00 38 does not appear in the occurrence form. This condition details the claims-made claim information the insurance company is required to release. The detailed analysis follows.

10. Your Right to Claim and Occurrence Information

The insurance company provides the first named insured information relating to any claims-made products/completed operations coverage issued to it during the previous three years. The information that must be released is:

Some type of record describing every occurrence notice the insurance company received. The record is not required to include notices of occurrences that were reported to prior carriers. The description must include the date plus a brief description of the occurrence but only if such information was in the initial loss notice received.

Note: The named insured’s reporting will determine the type of reports it can expect. If its initial notices are skimpy, this report will also be skimpy.

A policy-year summary of payments made and reserve amounts are provided but only those that are under the Aggregate Limit.

Reserve amounts are based on the insurance company's judgment, are subject to change at any time and without notice, and should not be considered as final settlement amounts.

The released information could compromise claim negotiations, so the policy prevents the named insured from disclosing or providing it to claimants and/or their representatives without its prior consent.

If the insurance company decides to cancel or not renew the coverage provided, this claim information must be provided 30 days or more prior to the cancellation or non-renewal date. In all other cases, it will provide this information only if a written request for such is received from the first named insured within the 60 days following the expiration date. The insurance company must provide the requested information within 45 days of the request date.

The insurance company provides a disclaimer. It makes no representations or warranties as to the accuracy of the information. Cancellation or non-renewal is still effective, even if the information provided is not accurate.

Example: Pelican, Inc. has been insured on a claims-made Products/Completed Operations Liability Coverage Form written by Creative Insurance Company for the past three years. Creative notifies Pelican that it is not renewing coverage and provides Pelican with two different reports. The first report reads as follows:
Date of loss	Loss description	Remarks
12/8/15	Property struck claim	10 storefronts
5/5/16	Child injury claim	1 child – under 5 years old
8/7/17	Property struck claim	Bridge
This report does not include ten other occurrences included on a similar report received from its previous carrier. The second report reads as follows:
Policy period	Amounts paid	Amounts reserved
01/01/15-01/01/16	$35,000	$0
01/01/16-01/01/17	$25,000	$400,000
01/01/17-01/01/18	$15,000	$150,000

SECTION V–EXTENDED REPORTING PERIODS

This section is found only in the claims-made coverage form. It does not appear at all in the occurrence coverage form. This section explains how the extended reporting periods work.

1. The insurance company provides one or more described Extended Reporting Periods. It is provided if this coverage is cancelled or is not renewed by either the named insured or the insurance company. It also applies if the insurance company replaces or renews the current policy with insurance that has a later retroactive date than the one shown on this declarations or with coverage provided is on other than a claims-made basis.

2. Extended Reporting Periods do not change the nature of the coverage provided or extend the coverage period. These periods apply only to claims for bodily injury or property damage that actually occur before the end of the coverage period and after any retroactive date on the declarations.

3. A Basic Extended Reporting Period is included automatically and without any additional premium charge. It begins at the end of the coverage period. It lasts for:

Five years for claims because of bodily injury and property damage but only if the occurrence from which they arise was reported to the insurance company no later than 60 days following the end of the policy period. The claim must be reported based on the terms in Section IV–Duties In The Event Of Occurrence, Claim Or Suit.
Sixty days if the claim is due to an occurrence that had not yet been reported to the insurance company.

Claims covered under any subsequent insurance coverage the named insured purchases or that would be covered except for the limit of insurance applying to such claims being used up are not eligible for coverage under this Basic Extended Period.

4. The Basic Extended Reporting Period uses the same limits available to the rest of the insurance policy.

Example: Major Insurance Company non renewed Realistic’s P/CO coverage, triggering the Basic Extended Reporting Period. Realistic's P/CO coverage had been on a claims-made basis for the past four years. The retroactive date was the date of the first claims-made policy and had never changed. The first claims-made coverage was effective 01/01/16 and the last claims-made P/CO coverage form expired 01/01/18.

A loss occurred on 05/06/13 and Major was notified. The claim didn’t arrive until 01/10/16. Because the claim was made during the extended reporting period and was reported before coverage expired, coverage could be available.
A loss occurred on 01/05/13 but was never reported to Major. A claim was finally filed on 03/15/18. Coverage does not apply because the claim was made more than 60 days after the coverage period ended and no previous notice of an occurrence had been filed.

5. A Supplemental Extended Reporting Period is available by endorsement and for an additional premium charge. It is of unlimited duration and begins when the Basic Extended Reporting Period ends. The onus is on the named insured to request the endorsement. It must do so quickly because if the named insured has not requested this endorsement within 60 days following the policy expiration date, the endorsement is no longer available at any cost. The premium is due promptly and coverage does not go into effect until after it is paid. The premium will be expensive but is capped at no more than 200% of the annual premium of this particular policy. The insurance company is required to consider exposures, insurance limits and types of insurance, limits available to pay for future claims and other relevant factors when setting the price. CG 28 34–Supplemental Extended Reporting Period Endorsement or CG 28 35–Supplemental Extended Reporting Period Endorsement for Special Accident, Products, Work or Locations must be attached to explain the terms and conditions specific to this reporting period.

6. A supplemental aggregate limit of insurance becomes available when the Supplemental Extended Reporting Period is in effect. The limit applies only for claims first received and recorded during the Supplemental Extended Reporting Period and is equal to the dollar amount on the declarations in effect at the end of the policy period.