1. Forms
2. CG
3. CG-20-03

Additional Insured - Concessionaires Trading Under Your Name (CG 20 03)

The CG 20 03 endorsement is a standard form used in Commercial General Liability (CGL) insurance. Its primary purpose is to extend liability coverage to concessionaires who operate under the named insured's business name. This means that if a concessionaire, while trading under the named insured's name, becomes legally liable for bodily injury or property damage to a third party, the named insured's CGL policy may provide coverage for that concessionaire. However, the coverage for the concessionaire is specifically limited to their liability as a concessionaire.

Classes of Business It Applies To

This endorsement is typically used in situations where a business (the named insured) allows other independent entities (concessionaires) to operate on their premises or as part of their event, using the named insured's established name and branding. Real-world examples include:

• Retail Department Stores: A large department store (named insured) might have a "store within a store" concept, where independent vendors (concessionaires) sell their goods, like cosmetics or jewelry, under the department store's name.
• Sports Stadiums or Entertainment Venues: The venue owner (named insured) may have various food and beverage vendors or merchandise sellers (concessionaires) operating during events, all under the venue's overall branding.
• Trade Shows and Exhibitions: An event organizer (named insured) might have exhibitors (concessionaires) who are presented to the public as being part of the main event and trading under its banner.
• Franchise-like Operations (without formal franchise agreement): Businesses that allow others to operate using their trade name in specific locations or for specific services, even if not a formal franchise, might use this endorsement.

Special Considerations

There are several important points to consider when using the CG 20 03:

• Trading Under Your Name: The key trigger for coverage under this endorsement is that the concessionaire must be "trading under your name" (the named insured's name). If the concessionaire operates under its own distinct name, this endorsement would not apply.
• Scheduled Concessionaires: The endorsement requires the specific concessionaire(s) to be listed in the Schedule of the endorsement or in the Declarations. It is not a blanket coverage for any and all concessionaires.
• Liability as a Concessionaire: Coverage for the additional insured concessionaire is restricted to liability arising directly out of their activities as a concessionaire for the named insured. It does not cover other business activities of the concessionaire that are unrelated to their role under the named insured's name.
• Contractual Requirements: If the requirement to provide additional insured status stems from a contract, the coverage afforded to the concessionaire will not be broader than what is required by that contract. Furthermore, the limits of insurance for the additional insured may be the lesser of the contractually required amount or the policy's applicable limits.
• "To the Extent Permitted by Law": The endorsement includes language stating that coverage for the additional insured only applies to the extent permitted by law. This acknowledges that some jurisdictions may have statutes affecting the enforceability of certain indemnification or additional insured provisions.
• No Coverage for Concessionaire's Sole Negligence (Potentially): While the base form provides coverage for the concessionaire's liability, the exact scope, especially concerning the concessionaire's sole negligence, can be a complex issue and may be influenced by other policy provisions, case law, and specific contractual agreements. It's crucial to review the entire policy and any applicable state laws.
• Relationship to CG 00 01: This endorsement modifies the standard CGL coverage form (CG 00 01). The terms and conditions of the CG 00 01 will apply unless specifically modified by the CG 20 03 or other endorsements.

Key Information for Agents and Underwriters

• Risk Assessment: Underwriters need to carefully assess the operations of both the named insured and the scheduled concessionaires. The types of activities the concessionaires are engaged in, their loss history, and the level of control and supervision exercised by the named insured are important factors. For example, a concessionaire selling low-risk items may present a different exposure than one operating amusement rides under the named insured's banner.
• Pricing: There may be an additional premium charge for adding a concessionaire as an additional insured, as it potentially expands the scope of coverage. The premium will depend on the underwriter's assessment of the increased risk.
• Coverage Gaps: Agents should advise their clients (both the named insured and potentially the concessionaire) that this endorsement provides specific, limited coverage. The concessionaire should still consider maintaining their own liability insurance for activities not covered under the named insured's policy or for liability that exceeds the coverage provided.
• Contract Review: It is crucial for agents and underwriters to review any contracts between the named insured and the concessionaire that mandate additional insured status. This helps ensure the endorsement aligns with the contractual obligations and identifies any potential discrepancies.
• Alternative Endorsements: Depending on the specific relationship and needs, other additional insured endorsements might be more appropriate. For example, if the concessionaire is leasing premises from the named insured, an endorsement like CG 20 11 (Additional Insured - Managers or Lessors of Premises) might also be considered, though CG 20 03 is specific to the "trading under your name" scenario.
• Clarity of Operations: Ensure clear documentation of which concessionaires are covered and the nature of their operations under the named insured's name. Ambiguity can lead to coverage disputes.
• Limits of Insurance: Recent revisions to additional insured endorsements, including the CG 20 03, clarify that the limits of insurance for the additional insured may not be strictly tied to the Declarations page if other endorsements or policy provisions alter those limits. The endorsement itself states it does not increase the applicable limits of insurance.