What it does
CG 21 39 replaces the "insured contract" definition with one that includes only (a) a lease of premises, (b) a sidetrack agreement, (c) an easement or license agreement (except construction or demolition within 50 feet of a railroad), (d) an indemnity obligation to a municipality required by ordinance (except for work for a municipality), and (e) an elevator maintenance agreement. The broad paragraph f. (assumption of another's tort liability in any contract pertaining to the business) is removed.
Who needs it
Most damaging for contractors and service firms that routinely sign indemnity agreements.
Key provisions and limits
- Applies to the CGL and Products/Completed Operations coverage parts.
- Also affects defense of indemnitees, which depends on insured contract status.
Quoting and selling notes
- Contractors with CG 21 39 generally cannot meet standard contract indemnity and insurance requirements; find another market or negotiate the contract.
- CG 24 26 is a narrower restriction that keeps paragraph f. but limits it to injury caused in whole or in part by the insured.
Why it matters
- Most construction, service and vendor contracts include an indemnity clause; with CG 21 39 attached the insured's promise to indemnify is uninsured, which can breach the contract's insurance requirements.
- Defense of an indemnitee under the base form depends on the contract being an "insured contract"; this endorsement removes that path for most business contracts.
- If a carrier insists on restricting contractual liability, CG 24 26 is a far narrower alternative that keeps coverage where the insured caused the injury in whole or in part.
