1. Forms
2. CG
3. CG-20-04

What the form is

The CG 20 04 Additional Insured - Condominium Unit-Owners endorsement is designed to be attached to a Commercial General Liability (CGL) policy written for a condominium association. Its primary function is to extend insured status to the individual condominium unit owners. However, this coverage for the unit owners is specifically limited to liability that arises out of the ownership, maintenance, or repair of the common areas of the condominium premises. It does not cover liability stemming from occurrences within an individual owner's unit or for their personal liability unrelated to the common areas.

Classes of business it applies to

This endorsement is exclusively used for Condominium Associations. When a condominium association purchases a CGL policy to cover its operations and premises, this endorsement addresses the shared liability exposure of the individual unit owners concerning the common areas.

Real-world example: If a guest slips and falls in a common hallway or near the shared swimming pool of a condominium complex due to alleged negligent maintenance by the association, and both the association and the individual unit owners are named in a lawsuit, this endorsement would provide coverage for the unit owners for their liability related to that common area incident, subject to the policy terms and limits.

Special considerations

• Mandatory for Condominium Associations: It is generally considered essential to include this endorsement when writing CGL coverage for a condominium association to adequately protect the interests of the individual unit owners regarding common area exposures.
• Scope of Coverage: Coverage is strictly limited to liability arising from common areas. It does not replace the need for individual unit owners to have their own homeowners (e.g., HO-6) or personal liability insurance for their individual units and personal exposures.
• Shared Limits: The limits of liability stated in the CGL policy are shared among all insureds, including the condominium association and all the individual unit owners who are added as insureds by this endorsement. The endorsement does not provide separate limits for each unit owner.

Key information for agents and underwriters

• Risk Assessment: The primary risk remains the condition and maintenance of the common areas, which is the responsibility of the condominium association. Adding unit owners via this endorsement doesn't fundamentally change the nature of the insured risk but clarifies who is protected for that shared risk.
• Pricing: Typically, there is no separate, distinct premium charge for adding the CG 20 04 endorsement. The premium for the CGL policy of a condominium association already contemplates the exposures arising from its premises and operations, including common areas.
• Distinction from Unit-Owner's Individual Policy: Agents should clearly explain to condominium associations and unit owners that this endorsement does not cover personal liability of unit owners for incidents within their own units or their personal acts unrelated to the common areas. Unit owners need their own HO-6 (or equivalent) policies for such exposures.
• Contractual Requirements: Condominium declarations or bylaws may sometimes stipulate the type of insurance the association must carry, potentially including the requirement to cover unit owners for common area liability.