1. Forms
2. CG
3. CG-20-37

Form CG 20 37: Additional Insured - Owners, Lessees Or Contractors - Completed Operations

1. What the form is

The CG 20 37 endorsement is a provision added to a Commercial General Liability (CGL) policy that extends coverage to a specifically scheduled person or organization (the additional insured) for liability arising out of the named insured's completed operations. Essentially, if the named insured (e.g., a subcontractor) finishes a job, and that completed work later causes bodily injury or property damage for which the additional insured (e.g., a project owner or general contractor) is held liable, this endorsement may provide coverage to that additional insured under the named insured's policy. It is designed to address liability that emerges after the project is finished, which is often referred to as "completed operations" or "products-completed operations hazard." This form specifically provides coverage for completed operations and does not cover ongoing operations.

2. Classes of business it applies to

This endorsement is predominantly used in the construction industry. It's crucial for projects where liability can arise long after the physical work is done. Real-world examples include:

• A general contractor requiring its subcontractors to name them as an additional insured for completed operations. If a subcontractor's faulty electrical work (now completed) causes a fire years later, the general contractor could be protected under the subcontractor's CGL policy via this endorsement.
• A property owner (lessor) requiring a tenant (lessee) or a contractor performing work on their behalf to add them as an additional insured for completed operations. For instance, if a newly installed staircase by a contractor collapses after completion, injuring someone, the property owner might seek coverage under the contractor's policy.
• Developers who hire various contractors and want to ensure they are protected from claims arising from the completed work of those contractors.

It is particularly important in situations where contractual agreements mandate that additional insured status for completed operations be maintained for a specific period after project completion.

3. Special considerations

• Complements, Not Replaces, Ongoing Operations Coverage: The CG 20 37 is specifically for completed operations. It is often used in conjunction with an endorsement like CG 20 10, which provides additional insured status for ongoing operations. Using CG 20 37 alone would mean no additional insured coverage during the work itself.
• Contractual Requirements: Many construction contracts explicitly require this endorsement to protect the project owner or general contractor from latent defects or issues that may surface years after project completion. It's vital to ensure the policy language aligns with the contractual obligations, including any specified duration for the completed operations coverage.
• "Your Work" Limitation: Coverage for the additional insured is typically limited to liability "caused, in whole or in part, by 'your work'" (the named insured's work) performed for that additional insured and included in the "products-completed operations hazard".
• Policy Limits: The endorsement does not increase the policy's overall limits. If a contract requires specific limits, the coverage afforded to the additional insured will not be broader than what is contractually required or the policy's available limits, whichever is less.
• Edition Dates: ISO (Insurance Services Office) periodically updates its forms. Different editions (e.g., CG 20 37 07 04, CG 20 37 04 13, CG 20 37 12 19) may have variations in wording, so it's crucial to use the correct and currently approved version, or the version specified in a contract. The latest versions may have language clarifying that coverage only applies to the extent permitted by law and will not be broader than contractually required.
• Professional Services Exclusion: Some newer automatic additional insured endorsements for completed operations (like CG 20 39 and CG 20 40) may contain exclusions for professional services, which are not typically found in the CG 20 37.
• Scheduled vs. Automatic: The CG 20 37 requires the additional insured person or organization to be specifically scheduled (named) on the endorsement. This differs from "blanket" or "automatic" additional insured endorsements (like CG 20 33 or CG 20 38 for ongoing operations, or CG 20 39 and CG 20 40 for completed operations) which may provide status automatically if certain contractual conditions are met.

4. Key information for agents and underwriters

• Pricing: Adding the CG 20 37 endorsement usually involves an additional premium. The cost can vary based on the nature of the named insured's business, the scope of their completed operations, the desired length of the reporting period, and the underwriter's assessment of the risk.
• Risk Assessment: Underwriters will carefully assess the named insured's type of work. Businesses involved in high-risk construction (e.g., roofing, foundation work, plumbing, electrical) may face more scrutiny and higher premiums for this coverage due to the long-tail nature of potential defects. The additional insured's own operations and their relationship to the named insured's work are also relevant.
• Coverage Gaps: A primary gap to avoid is failing to secure this endorsement when completed operations coverage is needed or contractually required. Relying solely on an ongoing operations endorsement like CG 20 10 will leave the additional insured unprotected for claims arising after the work is done. Conversely, having only CG 20 37 provides no coverage for the additional insured during the construction phase.
• Underwriting Guidelines:
  • Verify that the entity to be added as an additional insured has a legitimate insurable interest related to the named insured's completed work.
  • Confirm the specific project or location for which the completed operations coverage is being provided; this should be clearly described in the schedule.
  • Review the named insured's loss history, particularly for claims related to completed work.
  • Ensure clarity on the duration of completed operations coverage required by any contract and how this aligns with the policy's terms. Some contracts may specify a period (e.g., 2, 5, or 10 years post-completion) for which this coverage must be maintained.
  • Be aware that obtaining CG 20 37 can sometimes be challenging as some insurers are hesitant to provide broad completed operations coverage to additional insureds.
• Documentation: Always obtain a copy of the actual endorsement, not just a certificate of insurance, to verify the coverage provided. Ensure the scheduled name of the additional insured is accurate and matches contractual requirements.