1. Forms
2. CG
3. CG-21-33

Form CG 21 33: Exclusion - Designated Products

1. What the form is

The CG 21 33, formally titled "Exclusion - Designated Products," is an endorsement used with the Commercial General Liability (CGL) policy, most commonly the CG 00 01. Its primary function is to exclude coverage for "bodily injury" or "property damage" that is included in the "products-completed operations hazard" and arises out of specific products manufactured, sold, handled, or distributed by the named insured. These specific products are listed in the Schedule of the endorsement. Essentially, this form carves out certain products from the CGL's products-completed operations coverage. It allows an insurer to provide general liability coverage for most of an insured's operations while specifically excluding the risks associated with one or more problematic products. This provides an alternative to a broader exclusion of all products-completed operations liability (which would be done using form CG 21 04).

2. Classes of business it applies to

This endorsement can be relevant across a wide range of industries where a business deals with multiple products, and one or more of those products present an unacceptable or uninsurable risk to the underwriter. Examples include:

• Manufacturers: A company might manufacture a diverse line of products, but one particular product has a history of defects, is made with hazardous materials, or is intended for a high-risk use. For instance, a toy manufacturer might have a new, untested electronic toy with potential fire hazards that the insurer wishes to exclude while still covering their traditional line of plush toys.
• Distributors/Wholesalers: A distributor might handle products from various manufacturers. If one of those product lines is recalled or has known safety issues (e.g., imported goods that don't meet local safety standards), the CG 21 33 could be used to exclude that specific line.
• Retailers: While less common, a retailer selling a wide array of goods might have a specific product (perhaps a self-branded item or a product with unique liability concerns) that their CGL insurer is unwilling to cover. For example, a hardware store that also sells a specific type of potent chemical drain cleaner might see that cleaner excluded.
• Businesses with Discontinued or Divested Product Lines: If an insured has stopped manufacturing or selling a particular product but still faces potential "tail" liability (claims arising from products sold in the past), an insurer might use this endorsement on a new policy if they are unwilling to take on that historical product exposure, especially if the prior coverage for that product is unclear or insufficient.

3. Special considerations

• Specificity is Key: The product(s) to be excluded must be clearly and unambiguously described in the endorsement's Schedule. Vague descriptions can lead to coverage disputes. For example, simply stating "hazardous products" would be insufficient; it should specify "Widget Model X Serial Numbers 1000-5000."
• Coverage Gaps: The most significant consideration is the creation of a coverage gap for the excluded product(s). The insured will have no CGL coverage from that insurer for bodily injury or property damage arising from the designated products. It is crucial that the insured understands this and has alternative risk management strategies in place, such as:
  • Securing specialized products liability coverage for the excluded product from a different insurer (if available).
  • Implementing stringent quality control, warnings, and contractual indemnifications related to the excluded product.
  • Discontinuing the product line altogether.
• Relationship to CG 00 01: This endorsement modifies the standard CGL coverage form (CG 00 01). The definitions and other terms of the CG 00 01 will still apply to the covered products and operations. The CG 21 33 specifically amends the "products-completed operations hazard" definition as it pertains to the scheduled products.
• No Impact on Other Coverages (Generally): The exclusion is specific to the "products-completed operations hazard." It generally does not affect other CGL coverages like Premises/Operations liability, unless an injury or damage has a dual cause that blurs the lines (which would be a complex claims scenario).
• Underwriting Necessity: Often, the use of CG 21 33 is an underwriting requirement. The insurer may be willing to offer terms for the majority of the insured's exposures but finds the risk associated with a specific product to be outside their appetite or capacity. Without this exclusion, the insurer might decline to offer coverage at all.

4. Key information for agents and underwriters

• Risk Assessment: Underwriters will scrutinize product lines that involve new technologies, hazardous materials, products subject to recall, products with a poor loss history, or those intended for critical applications (e.g., medical devices, aviation components). The CG 21 33 is a tool to manage these identified high-risk products.
• Pricing Implications: Excluding a high-risk product should, in theory, result in a lower premium for the CGL policy than if the product were covered. However, the overall premium will still reflect the remaining exposures. The premium credit for the exclusion will depend on the perceived risk of the excluded product.
• Alternative to Declination: For agents, proposing the use of CG 21 33 can sometimes be a way to secure coverage for a client when an underwriter is hesitant due to a specific product. It allows the client to obtain needed general liability coverage for their other operations.
• Client Communication: Agents have a critical role in ensuring the insured fully understands the implications of this exclusion. The agent should document this discussion and confirm the insured is aware of the lack of coverage for the designated product(s) and the need to explore other risk mitigation or transfer options.
• Review Product Lists: It's essential to accurately identify and list all products that are intended to be excluded. Any ambiguity can lead to disputes. Underwriters should request detailed product information from the insured.
• Consider Stand-Alone Coverage Needs: If a significant or core product is excluded, the agent should discuss the possibility of the insured seeking stand-alone products liability coverage for that specific product, if such coverage is available in the marketplace (e.g., from surplus lines insurers or specialty markets).
• Impact on Umbrella/Excess Liability: If an umbrella or excess liability policy sits above the CGL, the exclusion of a designated product in the primary CGL will likely carry through to the excess layers, meaning no coverage for that product under the umbrella/excess policy either. This must be communicated to the insured.