1. Forms
2. CG
3. CG-21-47

What the form is

The CG 21 47, titled "Employment-Related Practices Exclusion," is an endorsement added to a Commercial General Liability (CGL) insurance policy. Its primary function is to explicitly remove coverage for claims alleging "bodily injury" or "personal and advertising injury" that arise from a wide range of employment-related practices conducted by the insured. This means that if an employee, former employee, or applicant for employment sues the insured business for actions like wrongful termination, discrimination, harassment, or other specified employment-related conduct, this endorsement aims to prevent the CGL policy from covering the defense costs or any resulting settlements or judgments.

Classes of business it applies to

This endorsement is broadly applicable to nearly any commercial entity that has employees, regardless of industry or size. Since all employers engage in practices such as hiring, managing, and terminating employees, they all face potential liability from these activities. Examples include:

• A retail store sued by a former employee for alleged wrongful termination.
• A tech company facing a lawsuit from an applicant claiming discriminatory hiring practices.
• A restaurant where an employee alleges harassment by a manager.

The endorsement is particularly significant for businesses that do not have a separate Employment Practices Liability Insurance (EPLI) policy, as it underscores the lack of coverage for such claims under the standard CGL.

Special considerations

• The CGL policy typically already excludes "bodily injury" to an employee arising out of and in the course of their employment, as this is generally covered by Workers' Compensation and Employers Liability insurance. The CG 21 47 endorsement expands on this by specifically targeting a broader array of employment practices that might otherwise lead to claims for "personal and advertising injury" (like defamation or humiliation) or even "bodily injury" in contexts not strictly within the typical employer's liability exclusion (e.g., emotional distress leading to physical symptoms claimed by a non-employee due to an employment practice).
• The '12 07' edition of this form was notably revised to broaden its exclusionary scope. This revision included adding "malicious prosecution" to the list of excluded offenses and clarifying that the exclusion applies regardless of whether the injury-causing event occurred before, during, or after the period of employment. These changes were, in part, a response to court decisions that had found coverage under earlier versions of the exclusion.
• Insurers often utilize this endorsement to clearly delineate that employment-related claims are not intended to be covered by the CGL policy, thereby encouraging insureds to procure specialized EPLI coverage.
• The applicability and wording of this endorsement can be subject to state-specific insurance regulations. For instance, the CG 21 47 is not approved for use in Texas; a different form, CG 26 39, serves a similar purpose in that state.
• While the endorsement aims to exclude liability for the insured employer, the specifics of how it applies to claims against individual insureds (such as managers or supervisors named in a lawsuit) would depend on the precise wording of the endorsement and the policy as a whole.

Key information for agents and underwriters

• Risk Assessment: The presence of the CG 21 47 endorsement is a critical indicator that the insured has a significant uninsured exposure for employment-related practices liability unless a separate EPLI policy is in place. Agents should always discuss this implication with their clients.
• Coverage Gaps: Agents must clearly communicate that relying on the CGL for employment practices claims is ill-advised, and this endorsement solidifies that position. Highlighting this coverage gap is essential.
• Pricing: While adding this exclusion might theoretically have a minor impact on the CGL premium by removing a potential area of exposure, its primary effect is on the scope of coverage rather than cost.
• Underwriting Guidelines: Underwriters frequently mandate the CG 21 47, particularly for businesses lacking formal human resources departments, those operating in sectors known for high employment litigation rates, or those in particularly employee-friendly legal jurisdictions. The goal is to prevent the CGL from inadvertently covering exposures that should be addressed by EPLI.
• Definitions are Key: The definitions of "employee" and the specific "employment-related practices" listed in the endorsement are crucial for understanding the full extent of the exclusion.
• State Variations: Agents and underwriters must be aware of any state-specific regulations or alternative forms related to the exclusion of employment practices liability (e.g., Texas CG 26 39).