1. Forms
2. CG
3. CG-20-32

What the form is

The CG 20 32 is an endorsement to a standard Commercial General Liability (CGL) policy. Its primary purpose is to provide additional insured status to specified engineers, architects, or surveyors. A key condition for the use of this endorsement is that these design professionals are not engaged (hired or contracted) by the named insured. Instead, they are typically engaged by another party involved in the project, such as the project owner, but a contract requires the named insured (e.g., a contractor) to include them as additional insureds on their CGL policy. The coverage granted to these additional insureds is specifically for liability arising from the named insured's ongoing operations or the acts or omissions of those acting on the named insured's behalf. Importantly, this endorsement contains an exclusion for the professional liability of the engineers, architects, or surveyors; it is not intended to cover their errors or omissions in their professional design services.

Classes of business it applies to

This endorsement is most commonly used in the construction industry. It addresses situations where a project owner or developer requires their contractor (the named insured) to extend liability coverage to the project's design professionals (architects, engineers, surveyors) who were hired directly by the owner or another party, not by the contractor.

Real-world example: A real estate developer (project owner) hires an architectural firm to design a new office building and a general contractor to construct it. The contract between the developer and the general contractor stipulates that the contractor must name the developer's architectural firm as an additional insured on the contractor's CGL policy. The contractor would use endorsement CG 20 32 to fulfill this requirement, providing coverage to the architectural firm for liability stemming from the contractor's work at the site, but not for the architects' design mistakes.

Special considerations

• Scope of Coverage: Coverage for the additional insured is limited to liability for 'bodily injury', 'property damage', or 'personal and advertising injury' that is caused, in whole or in part, by the named insured's acts or omissions, or the acts or omissions of those acting on the named insured's behalf. This language is critical as it generally aims to prevent coverage for the additional insured's sole negligence.
• Professional Liability Exclusion: The endorsement explicitly excludes coverage for the rendering of or failure to render professional services by the architect, engineer, or surveyor. This means their own professional errors and omissions are not covered under the named insured's CGL policy via this endorsement. These professionals should have their own Professional Liability (Errors & Omissions) insurance.
• Contractual Requirement: The endorsement is typically used when there is a contractual obligation for the named insured to provide additional insured status to these non-engaged design professionals.
• Ongoing Operations: Coverage under this endorsement is often tied to the named insured's ongoing operations. Once the named insured's work is completed, this specific endorsement may no longer provide coverage, and a different endorsement (like CG 20 37 for completed operations) might be needed if continued coverage for the additional insured is required for completed work.
• Edition Dates: The specific wording and coverage provided by the CG 20 32 can vary between its different edition dates (e.g., 07 98, 04 13, 12 19). Older editions might have offered broader coverage, so it's essential to use the correct and current version as per insurer filings and contractual agreements.
• Distinction from CG 20 31: If the engineers, architects, or surveyors are engaged by the named insured, then a different endorsement, CG 20 31 (Additional Insured - Engineers, Architects or Surveyors), would typically be used.

Key information for agents and underwriters

• Verify Contracts: Always review the underlying contract that mandates adding the engineer, architect, or surveyor as an additional insured to understand the specific requirements and ensure the endorsement aligns.
• Educate Insureds: Clearly explain to the named insured and the prospective additional insured the scope and limitations of the coverage provided by this endorsement, especially the professional liability exclusion.
• Risk Assessment: Underwriters should evaluate the nature of the named insured's operations and the potential for these operations to result in liability for the non-engaged design professionals. The primary risk being covered is vicarious liability.
• Pricing: While providing additional insured status can increase exposure, the exclusion of professional liability for the design professional mitigates some of that increased risk. Pricing should reflect the specific circumstances of the project and the named insured's operations.
• Coverage Gaps: Agents should advise clients (both the named insured and potentially the additional insured, if also a client) about potential coverage gaps, such as the lack of professional liability coverage for the design professional under this endorsement, and recommend appropriate separate coverages (e.g., standalone Professional Liability for the design firm).
• 'Caused, in whole or in part' Language: Be mindful of this language, which is intended to ensure that the named insured's actions or inactions contribute to the loss for coverage to apply to the additional insured. This generally precludes coverage for the additional insured's sole negligence.