1. Forms
2. CG
3. CG-21-80

What the form is

The CG 21 80, titled "Certified Acts of Terrorism Aggregate Limit; Cap on Losses from Certified Acts of Terrorism," is an endorsement used to modify commercial liability insurance policies. Its primary function is to establish a specific, lower aggregate limit for losses arising from "certified acts of terrorism," as defined by the Terrorism Risk Insurance Act (TRIA). This sub-limit is indicated on the endorsement schedule and is separate from the overall TRIA aggregate limitation. The endorsement also reiterates that losses from certified acts of terrorism are subject to the $100 billion industry aggregate cap imposed by TRIA.

Classes of business it applies to

This endorsement can be attached to various liability policies, including but not limited to:

• Commercial General Liability (CGL) policies (e.g., CG 00 01)
• Owners and Contractors Protective Liability Coverage Form (e.g., CG 00 09)
• Railroad Protective Liability Coverage Form (e.g., CG 00 35)
• Liquor Liability Coverage Forms
• Products/Completed Operations Liability Coverage Part

It is relevant for any insured that has terrorism coverage for certified acts but for whom the insurer wishes to apply a specific sub-aggregate limit to that exposure. This might be due to the insured's location, type of business, or overall risk profile related to terrorism.

Special considerations

Key considerations for the CG 21 80 include:

• TRIA Dependency: The endorsement's provisions are closely tied to the existence and framework of the Terrorism Risk Insurance Act (TRIA) and its subsequent reauthorizations.
• Sub-limit Application: It introduces a sub-aggregate limit for certified acts of terrorism that is less than the policy's general aggregate limit or other applicable limits. This sub-limit is specific to losses from certified acts of terrorism.
• Not a Grant of Coverage: This endorsement does not provide coverage for terrorism; rather, it limits the coverage already provided under the policy for certified acts of terrorism.
• Interaction with other TRIA endorsements: It is one of several ISO endorsements addressing TRIA. For example, it is similar to CG 21 70 (Cap on Losses from Certified Acts of Terrorism), but CG 21 80 specifically adds the scheduled sub-aggregate limit.

Key information for agents and underwriters

For insurance professionals, the CG 21 80 presents several important points:

• Risk Management: Underwriters use this endorsement to manage their PML (Probable Maximum Loss) for terrorism risks by capping their exposure for certified acts of terrorism to a specific amount shown on the schedule, which is below other policy limits.
• Clarity for Insureds: Agents must clearly explain to insureds how this endorsement modifies their terrorism coverage, particularly the imposition of a sub-aggregate limit for certified acts. It's crucial the insured understands that this limit is specific to certified acts and is separate from the overall TRIA cap.
• Pricing and Availability: The decision to offer terrorism coverage and whether to attach an endorsement like CG 21 80 can be influenced by the insured's risk profile, geographic location, and the underwriter's appetite for terrorism risk.
• Compliance with TRIA: The use of this and related endorsements helps insurers comply with TRIA requirements regarding offering terrorism coverage and disclosing how policy limits apply to certified acts.