ISO
COMMERCIAL LIABILITY UMBRELLA COVERAGE FORM BUSINESSOWNERS LIABILITY CHANGES
ENDORSEMENT
(April 2019)
INTRODUCTION
The Insurance Services Office (ISO) Commercial Liability Umbrella Coverage Form is usually written to reflect commercial general liability as the primary underlying coverage. However, a Businessowners Policy may provide the commercial general liability coverage instead. In that case, the commercial liability umbrella coverage form must be endorsed to reflect that situation. ISO rules require attaching CU 24 29–Businessowners Liability Changes to the umbrella coverage form when a Businessowners Policy provides the underlying commercial general liability coverage.
This endorsement is introduced with the 04 13 edition of CU 00 01–Commercial
Liability Umbrella Coverage Form. The only change it makes is to completely
replace Section III-Limits of Insurance. This is necessary because the limits
of insurance on a Businessowners Policy are not as broad as on commercial general
liability coverage forms. This means that using CU 00 01 over a Businessowners
Policy could have created ambiguity with respect to how certain limits should
apply. This newly introduced endorsement eliminates that problem.
CU 24 29–BUSINESSOWNERS LIABILITY
CHANGES
Schedule
The schedule on this endorsement replaces the limits schedule on the declarations. The primary change is to eliminate the personal and advertising injury limit.
Section
III-Limits of Insurance Changes
The rest of the endorsement completely replaces Section III–Limits of Insurance.
Paragraph 1. and paragraph 2. in this endorsement and in CU 00 01 are identical.
Paragraph 3. modifies paragraph 3. and paragraph 4. in CU 00 01. This is the major change because using this endorsement reduces limits. In CU 24 29, the occurrence limit is the most paid for the sum of all bodily injury and property damage in a single occurrence plus the personal and advertising injury a single person or organization sustains. Under CU 00 01, the personal and advertising injury limit is separate from the bodily injury and property damage occurrence limit.
It is important to note that this approach is the same approach the Businessowners Policy uses, and this simply brings that method into the commercial liability umbrella policy. This reduces confusion by the insurance limits section being consistent.
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Example: Melanie sues Jack and Jill. She alleges that they caused multiple injuries to her and maligned her character at the scene of the accident and afterward. She sues for both extensive bodily injury and property damage and for the damage to her reputation because of their actions. Jack and Jill are insured under a Businessowners Policy with $1,000,000 occurrence and $2,000,000 aggregate limits. There is also a commercial liability umbrella with $1,000,000 occurrence and $2,000,000 aggregate limits. Scenario 1: CU 24 29 is not attached. Jack and Jill have $1,000,000 underlying limits available and $1,000,000 available for the bodily injury and property damage and another $1,000,000 for the personal and advertising liability in the umbrella. The maximum payout would be $3,000,000. Scenario 2: CU 24 29 is attached. Jack and Jill have $1,000,000 underlying limits available and $1,000,000 umbrella limits available. The maximum payout would be $2,000,000. |
Paragraph 4. is almost identical to paragraph 5. in CU 00 01. It eliminates the paragraph that explains how claims-made non-concurrency works. This is appropriate because Businessowner Policies are not written on a claims-made basis. However, this could present a problem if CU 04 03–Employee Benefits Liability Coverage or CU 04 12–Condominiums, Co-ops, Association–Directors and Officers Liability Coverage are attached to the umbrella and the underlying coverages are non-concurrent.