1. Forms
2. CG
3. CG-21-70

What the form is

The CG 21 70 "Cap on Losses From Certified Acts of Terrorism" endorsement is an Insurance Services Office (ISO) form used in commercial liability insurance. Its primary purpose is to affirm that if a 'certified act of terrorism' occurs, the total insured losses paid by all insurers for that event will be capped at $100 billion, as mandated by the Terrorism Risk Insurance Act (TRIA). This endorsement does not provide terrorism coverage itself; rather, it clarifies a limitation on the amount payable under the policy in conjunction with TRIA. It stipulates that the insurance company will not be liable for losses exceeding its share of this $100 billion cap, and notes that the Department of Treasury would oversee the pro-rata distribution of claim payments if the cap is reached.

Classes of business it applies to

This endorsement is broadly applicable across various lines of commercial insurance where terrorism coverage is offered or included. It can be attached to several ISO coverage parts, including:

• Commercial General Liability Coverage Part
• Liquor Liability Coverage Part
• Owners and Contractors Protective Liability Coverage Part
• Pollution Liability Coverage Part
• Products/Completed Operations Liability Coverage Part
• Railroad Protective Liability Coverage Part
• Underground Storage Tank Policy

Therefore, it can impact a wide range of industries and businesses that carry these types of insurance policies and have terrorism coverage.

Special considerations

Key considerations for the CG 21 70 include:

• TRIA Compliance: The endorsement is integral to compliance with the Terrorism Risk Insurance Act and its subsequent reauthorizations. It ensures that policyholders are aware of the federal program's limitations.
• Not a Coverage Grant or Exclusion: It's crucial to understand that this form neither adds nor removes terrorism coverage. The actual coverage for terrorism is determined by other policy provisions and endorsements. CG 21 70 specifically addresses the maximum payout limit under TRIA.
• 'Certified Act of Terrorism': The cap applies only to losses resulting from an event that is officially certified as an act of terrorism by the Secretary of the Treasury, in consultation with the Secretary of Homeland Security and the Attorney General.

For example, if a large-scale terrorist event is certified and total insured losses exceed $100 billion, this endorsement clarifies that an individual insurer's liability (and thus the policyholder's recovery from that insurer) will be subject to their proportional share of that capped amount.

Key information for agents and underwriters

For Agents:

• Clearly explain to clients that this endorsement is a notification of a federally mandated cap on terrorism losses and not a reduction or elimination of their terrorism coverage (if such coverage is provided in their policy).
• Ensure clients understand that this cap applies to the aggregate of all insured losses from a certified event, not just their individual claim.

For Underwriters:

• This is a standard endorsement when providing coverage subject to TRIA. Its presence confirms adherence to the federal program's structure.
• The pricing and availability of terrorism coverage itself are separate underwriting considerations, influenced by factors like exposure, location, and the specific terms of other terrorism-related endorsements (e.g., those that might exclude certain types of terrorism or provide specific sub-limits if CG 21 70 is rejected and another form like CG 21 82 is used).
• While CG 21 70 is a countrywide form, be aware of any state-specific rules or forms that might interact with or modify terrorism coverage provisions (e.g., requirements for ensuing fire coverage in some states).