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3. CG-20-26

Form CG 20 26: Additional Insured - Designated Person Or Organization

The CG 20 26 is an endorsement to a Commercial General Liability (CGL) policy, such as the CG 00 01, that extends liability coverage to a specific person or organization not originally named as an insured on the policy. Its primary purpose is to protect the additional insured from liability arising out of the named insured's operations or premises owned by or rented to the named insured. The scope of this coverage is not blanket; it is specifically tied to the actions or omissions of the named insured or those acting on their behalf. Importantly, the coverage afforded to the additional insured will not be broader than what is required by a contract or agreement between the named insured and the additional insured, and it only applies to the extent permitted by law.

Classes of Business and Applications

The CG 20 26 is a versatile endorsement used across various industries when a business relationship necessitates extending liability coverage. Common scenarios include:

• Construction Projects: A general contractor (named insured) might add a property owner or another contractor (additional insured) to their CGL policy. This protects the owner from liability stemming from the general contractor's work on the site.
• Landlord-Tenant Agreements: A tenant (named insured) leasing a commercial space may be required by the landlord (additional insured) to add them to their liability policy. This covers the landlord for liability arising from the tenant's operations on the leased premises.
• Service Agreements: Companies providing services at a client's location, such as a janitorial service (named insured) at an office building (additional insured), might use this endorsement.
• Joint Ventures: Members of a joint venture might use this endorsement to name other members as additional insureds on their respective CGL policies, providing protection for liability arising from the activities of the joint venture.
• Events and Permitting: Organizations hosting events or requiring permits from a municipality may need to add the city or permitting body as an additional insured. For example, a film production company shooting on city property would likely need to add the City of New York as an additional insured using a form like CG 20 26.

Special Considerations

There are several important factors to consider when utilizing the CG 20 26:

• Contractual Requirements: Often, the requirement to add an additional insured, and the extent of that coverage, is dictated by a contract between the named insured and the designated person or organization. The endorsement's coverage will typically not extend beyond what is contractually mandated.
• "Arising Out Of" Language: The coverage for the additional insured is typically limited to liability "arising out of" the named insured's operations or premises. The interpretation of this phrase can be crucial in determining coverage.
• Ongoing Operations vs. Completed Operations: Standard versions of the CG 20 26 generally apply to "ongoing operations". If coverage for "completed operations" is required for the additional insured, a different or additional endorsement (like CG 20 37) might be necessary.
• Limits of Insurance: The endorsement does not increase the policy's overall limits. If a contract specifies a certain limit of coverage for the additional insured, that limit will apply, or the policy's limit, whichever is less.
• Specificity: The person or organization to be added as an additional insured must be specifically named in the endorsement's schedule or in the policy declarations.
• Sole Negligence: Depending on the edition date of the endorsement and prevailing case law, coverage for the additional insured's sole negligence may be limited or excluded. Later editions of ISO forms often aim to prevent coverage for the additional insured's sole negligence.

Key Information for Agents and Underwriters

Agents and underwriters should pay close attention to the following when dealing with the CG 20 26:

• Risk Assessment: The underwriter must assess the additional risk exposure brought by adding the designated person or organization. This involves understanding the relationship between the named insured and the additional insured, and the nature of the operations or premises involved.
• Pricing: Adding an additional insured can impact the premium, depending on the perceived increase in risk. The underwriter will evaluate the potential for claims involving the additional insured.
• Coverage Gaps: It's crucial to ensure the endorsement provides the intended scope of coverage and doesn't create unintended gaps. For instance, if completed operations coverage is needed by the additional insured, relying solely on a standard CG 20 26 for ongoing operations would be insufficient. Agents should discuss the specific needs with the insured to ensure proper coverage.
• Underwriting Guidelines: Insurers will have their own underwriting guidelines for accepting additional insureds. Some relationships or operations may be deemed too high-risk. Company approval is typically required.
• Contract Review: Agents and underwriters should, when possible, review the underlying contract that necessitates the additional insured status. This helps ensure the policy and endorsement align with the contractual obligations. Understanding the indemnity provisions in the contract is also important.
• Alternative Endorsements: While CG 20 26 is a general use endorsement, other, more specific additional insured endorsements may be more appropriate depending on the relationship (e.g., CG 20 11 for Lessors of Premises, CG 20 28 for Lessors of Leased Equipment). However, CG 20 26 offers flexibility when a more specific form isn't suitable or when the contractual requirement is broad.
• Edition Dates: The edition date of the CG 20 26 (e.g., 04 13, 11 85) is critical, as the language and scope of coverage can vary significantly between editions. Older editions, like the 11 85, were often broader.