Form CA 25 14: Broadened Coverage - Garages
1. What the form is
The CA 25 14, Broadened Coverage - Garages endorsement is designed to expand upon the standard coverages offered in the Garage Coverage Form (CA 00 05). It aims to fill potential gaps in a garage business's liability protection by adding or enhancing several coverages typically found in a Commercial General Liability (CGL) policy but not automatically included in a standard Garage policy. This endorsement is crucial because the basic Garage Coverage Form may not be as comprehensive as a CGL policy. The CA 25 14 applies specifically to garage operations and not to liabilities arising from the ownership, maintenance, or use of covered vehicles.
Key coverages added or enhanced by this endorsement often include:
- Personal and Advertising Injury Liability: Covers offenses like false arrest, malicious prosecution, slander, and copyright infringement.
- Host Liquor Liability: Provides coverage if the insured is held liable for bodily injury or property damage arising out of the serving of alcohol at a company function, provided the insured is not in the business of selling alcohol.
- Fire Legal Liability / Damage to Rented Premises: Broadens coverage for fire damage to premises rented to the insured. It can also include coverage for damage to rented premises (including contents) from causes other than fire if rented for seven or fewer consecutive days. A standard limit, often $100,000, may apply unless a different limit is scheduled.
- Incidental Medical Malpractice Liability: Covers bodily injury arising out of the rendering of or failure to render medical services by the insured on the premises.
- Non-Owned Watercraft Liability: Provides coverage for liability arising from the use of certain non-owned watercraft.
- Spouses as Insureds: May include the spouse of an insured partner as an insured.
- Automatic Liability Coverage for Newly Acquired Garage Businesses: Extends coverage to newly acquired garage businesses for a limited time, often 90 days.
- Limited Worldwide Liability Coverage: Offers some coverage for garage operations exposures that occur outside the standard coverage territory. It's important to note this is not intended to provide worldwide auto liability protection.
2. Classes of business it applies to
This endorsement is specifically tailored for businesses eligible for the Garage Coverage Form (CA 00 05). These typically include:
- Automobile Dealers: Both new and used car dealerships.
- Repair Shops and Service Stations: Businesses engaged in servicing and repairing vehicles.
- Body Shops: Businesses specializing in collision repair and auto body work.
- Storage Garages and Parking Lots: Businesses that store or park vehicles for a fee.
- Other businesses with significant "garage operations" exposures, such as detail shops.
Real-world example: A car dealership hosts an open house event and serves alcoholic beverages. If a guest becomes intoxicated and causes an accident on their way home, the Host Liquor Liability portion of the CA 25 14 could provide coverage for the dealership's liability. Similarly, if the dealership rents a small adjacent space for a 5-day promotional event and accidentally causes damage (not by fire) to the rented premises, the broadened Damage to Rented Premises coverage could apply.
3. Special considerations
- Not a CGL Replacement: While the CA 25 14 adds many CGL-like coverages, it's crucial to understand that it modifies the Garage Coverage Form and is not a standalone CGL policy. The Garage Coverage Form has its own unique structure and limitations.
- Garage Operations Only: The broadened coverages provided by this endorsement typically apply only to the "garage operations - other than covered autos" exposure, meaning the premises and operational risks, not the auto liability risks.
- Interaction with Auto Dealers Coverage Form (CA 00 25): Insurance Services Office (ISO) has introduced the Auto Dealers Coverage Form (CA 00 25) which incorporates some coverages previously added by endorsements like CA 25 14. For instance, the Auto Dealers form may include Personal and Advertising Injury Liability and coverage for damage to rented premises. Depending on the edition of the forms used and specific state rules, the necessity or scope of CA 25 14 might change when CA 00 25 is used.
- State Variations: While described as applicable in "All States," specific provisions, interpretations, or availability might be influenced by state-specific regulations or insurer filings.
- Care, Custody, or Control Exclusion: The Garagekeepers coverage (Section III of the Garage Coverage Form) is essential for damage to customers' vehicles in the insured's care. The Fire Legal Liability portion of CA 25 14 addresses damage to rented premises, which is different from damage to customers' autos.
Real-world example: A repair shop rents an additional bay for a one-week period to handle overflow work. An employee accidentally damages a customer's car while it's in this rented bay. The damage to the customer's car would be addressed under Garagekeepers coverage. If, however, the employee negligently causes a fire that damages the rented bay itself, the broadened Fire Legal Liability coverage from CA 25 14 would be relevant for the damage to the building.
4. Key information for agents and underwriters
- Risk Assessment: Underwriters should carefully assess the specific operations of the garage business. Businesses that host events, frequently rent temporary premises, or have significant advertising exposures will benefit more directly from this endorsement.
- Pricing: The premium for this endorsement will reflect the added scope of coverage. Underwriters will consider the limits selected for coverages like Damage to Rented Premises.
- Coverage Gaps: Agents should recommend CA 25 14 to most garage risks to address common liability exposures not covered by the basic Garage Coverage Form. Failing to offer this endorsement could leave significant gaps.
- Distinguish from Auto Liability: It's critical to explain to insureds that the coverages provided by CA 25 14 primarily relate to their premises and operational liability (non-auto exposures) and do not typically extend auto liability coverage itself. For example, the Limited Worldwide Liability is for garage operations, not for driving a covered auto worldwide.
- Professional Services Exclusion: Revisions have clarified that professional services excluded in the CGL (and by extension, sometimes through this endorsement) often refer to professional health care services. However, the scope of any professional liability exclusion should be carefully reviewed based on the specific edition of the form.
- Newly Acquired Businesses: The 90-day automatic coverage for newly acquired garage businesses is a valuable feature but has a time limit. Insureds must be advised to report acquisitions promptly to ensure continuous coverage.
- Aggregate Limits: When these broadened coverages are added, they often become subject to the policy's aggregate limit for Garage Operations – Other Than Autos.
Real-world example for underwriters: An auto dealership applying for coverage frequently sponsors local community events and uses extensive advertising. The underwriter would recognize the heightened Personal and Advertising Injury and Host Liquor Liability exposures. They would likely see the CA 25 14 as essential and price it accordingly, ensuring the limits for Damage to Rented Premises are adequate if the dealership also occasionally rents off-site locations for special sales events.