Product Update

ISO CGL Endorsement CG 20 38 Discussed in Commercial Liability Insurance


This Commercial Liability Insurance release adds commentary to the discussion of one of the important endorsement revisions introduced by Insurance Services Office, Inc. (ISO) in 2019.

When the CGL endorsement Additional Insured—Owners, Lessees or Contractors—Automatic Status for Other Parties When Required in Written Construction Agreement with You (CG 20 38) was introduced in 2013 as a way of providing extracontractual upstream additional insured status on an automatic basis, the coverage applied in connection with the named insured's acts or omissions "in the performance of your ongoing operations for the additional insured." That language was the same as the language of other standard additional insured endorsements.

CG 20 38 immediately raised some concerns among insurance professionals. Its purpose is to extend additional insured coverage to parties with whom the named insured has no direct contractual relationship—for example, a subcontractor who is obligated by its subcontract with the general contractor to make the project owner an additional insured. But in these cases, the named insured will not technically be performing operations for the additional insured. To clarify this point, CG 20 38 was revised as part of the 2019 ISO countrywide CGL filing to make clear that additional insured status is triggered for upstream, extra-contractual parties even when the named insured's operations are being performed for an additional insured with whom the named insured has a direct contractual relationship. The point is explained fully in a revised discussion of endorsement CG 20 38.