CG 20 10 ENDORSEMENT

CG 20 10 Endorsement – Adding Additional Insured Status

Picture this: your client, a construction company, secured a huge project contract. However, the project owner requests to be listed as an additional insured under the company's general liability insurance, specifically by requesting a CG 20 10 endorsement. Fortunately, you, as the insurance professional, have a good understanding of the CG 20 10 endorsement and can guide your client through the process.

TL;DR

CG 20 10 Endorsement is a commercial general liability insurance form that extends the policy's coverage to include additional insured individuals.

It is vital for agency work as it represents a common requirement in construction contracts.

Misunderstanding often arises about the difference between ongoing and completed operations coverage.

A quick win for agencies is to clarify the scope of coverage, ensuring clients understand the limitations of the CG 20 10 endorsement.

What Is CG 20 10 Endorsement in Insurance?

Plain-language definition:

The CG 20 10 endorsement is an additional insured endorsement that construction companies attach to their general liability insurance. It provides coverage to other parties, like project owners or general contractors, for any accidents or damage related to the construction work.

Technical definition:

The CG 20 10 endorsement, as outlined in the Insurance Services Office (ISO) catalogue, revises a Commercial General Liability form by extending coverage to additional insured parties. It typically applies to "ongoing operations" performed for the additional insured at the project site and occasionally "completed operations." The specifics depend on the edition date of the form, with the 11/85 version covering both ongoing and completed operations, unlike later versions.

Key Related Terms to Know

CG 2010: cg 2010 is another name for the CG 20 10 endorsement.

CG 20 37 Endorsement: The CG 20 37 endorsement extends coverage to the additional insured for completed operations.

Blanket additional insured endorsement: This endorsement provides automatic additional insured status to any entity requiring such in a written agreement.

11/85: Refers to the edition of the CG 20 10 endorsement of November 1985, which covers both ongoing and completed operations.

CG 20 33 Endorsement: An alternate additional insured endorsement form with different coverage triggers and limitations.

Common Questions About CG 20 10 Endorsement

What is the difference between CG 20 10 and CG 20 37?

CG 20 10, depending on edition date, may only cover ongoing operations performed for the additional insured. If the work is complete and an accident later occurs, this form may not offer coverage. That's where the CG 20 37 endorsement comes in, covering completed operations for the additional insured.

Why is the CG 20 10 - 11/85 version preferred by potential additional insureds?

The 11/85 version is unique because it extends coverage for your ongoing operations and for liability arising out of completed operations. This is beneficial for stakeholders like project owners in situations where a loss occurs due to the contractor's work even after the project is done.

What are some typical exclusions on the CG 20 10 endorsement?

The CG 20 10 endorsement will not cover damage to the additional insured's product, work performed by their own employees, or defects in the named insured's work discovered before the project has been completed.

How does the CG 20 10 endorsement limit the insurance carrier's liability in case of a claim?

The endorsement explicitly states that it does not increase the policy's limits of insurance. This means that if a loss exceeds the named insured’s policy limit, any additional costs might not be covered by the insurer.

CG 20 10 vs. CG 2037

The distinct difference between the CG 20 10 and CG 2037 forms lies in the coverage provided for ongoing operations and completed operations.

Comparison Area	CG 20 10	CG 2037
Primary use case	Provides additional insured coverage for ongoing operations	Provides additional insured coverage for completed operations
Coverage / concept type	Additional insured coverage / ongoing operations	Additional insured coverage / completed operations
Typical exclusions	Defects in work before completion; damage to the insured's product	Claims arising from ongoing operations are excluded
Who is most affected by errors	Construction contractors, project owners	Contractors and subcontractors, after project completion
Common mistakes	Misunderstanding about "ongoing operations" coverage	Misunderstanding about "completed operations" coverage

Real Claim Examples Involving CG 20 10 Endorsement

Scenario 1: A construction firm subcontracted part of a job on a multi-million dollar project. After project completion, a passerby was injured due to a defect in the work performed by the subcontractor. The project owner, an additional insured under the contractor's policy via a CG 20 10 endorsement, was held liable. The insurer covered the claim under the policy.

Scenario 2: During construction, a falling tool caused property damage to a nearby building. The building owner sued for compensation. The general contractor was listed as an additional insured under the subcontractor's policy with a CG 20 10 endorsement, and the insurer defended and settled the claim.

Scenario 3: In a property development project, a finished building collapsed due to structural flaws in the materials used by the contractor. The Developer, listed as additional insured on the CG 20 10 (11/85) endorsement, filed a claim. The insurer dismissed the claim, citing the finished work exclusion in the standard CG 20 10 endorsement. However, as the 11/85 edition covered completed operations, the decision was challenged, and the insurer eventually accepted the claim.

Limitations and Common Mistakes

The CG 20 10 endorsement does not increase policy limits. The limit is shared among all insureds.

Standard CG 20 10 endorsements do not automatically cover completed operations but older editions like the 11/85 do.

The additional insured status is only granted when required by a written contract or agreement.

The additional insured coverage is limited to the scope of work agreed upon with the named insured.

How to Explain CG 20 10 Endorsement to Clients

Personal lines client: Think of the CG 20 10 as a guest pass to someone else's insurance. It's often used in the construction industry when a company needs to add a project owner or another party to their insurance coverage for a particular project they're working on.

Small Business owner: If you are taking on a construction project, you might need to be listed as an additional insured on their policy. This CG 20 10 endorsement allows you to share their liability insurance in case of a mishap related to the construction work.

CFO or Risk Manager: The CG 20 10 endorsement represents a tool for risk transfer. It extends the contractor's Commercial General Liability policy to you as an additional insured. It's critical for you to verify the version of the CG 20 10 endorsement used; not all versions cover completed operations.