1. Forms
2. CG
3. CG-21-82

What the form is

The CG 21 82 endorsement, titled "Certified Acts Of Terrorism Aggregate Limit; Cap On Losses From Certified Acts Of Terrorism," is an endorsement to the Commercial General Liability (CGL) policy. Its primary function is to establish a specific sub-limit for the amount the insurer will pay for damages and defense costs arising from "certified acts of terrorism." This sub-limit is part of, and not in addition to, the policy's overall aggregate limits. Furthermore, the endorsement reinforces that coverage for certified acts of terrorism is subject to the $100 billion industry-wide cap on losses as stipulated by the Terrorism Risk Insurance Act (TRIA).

Classes of business it applies to

This endorsement is relevant for virtually any commercial insured that purchases terrorism coverage as part of their CGL policy, particularly those subject to the provisions of TRIA. It is not specific to particular industries but applies broadly to businesses seeking to manage their financial exposure to acts of terrorism. Examples include:

• Real estate owners and developers (e.g., office buildings, shopping malls)
• Hospitality businesses (e.g., hotels, resorts)
• Manufacturing companies
• Educational institutions
• Public venues (e.g., stadiums, convention centers)
• Any business with significant property values or potential for third-party liability resulting from a terrorist act.

Special considerations

• TRIA Prerequisite: The use of this endorsement is tied to the Terrorism Risk Insurance Act. It is typically attached when an insured has not rejected terrorism coverage offered pursuant to TRIA.
• Aggregate Limit: The endorsement will show a specific aggregate limit for certified acts of terrorism. This limit is the maximum the insurer will pay for all covered losses resulting from such acts during the policy period, regardless of the number of claims or occurrences. This sub-limit is separate from the overall TRIA aggregate limitation.
• Interaction with other forms: It may be used in conjunction with other terrorism-related endorsements, such as CG 21 70 (Cap on Losses From Certified Acts of Terrorism) or CG 21 80 (Certified Acts of Terrorism Aggregate Limit; Cap on Losses From Certified Acts of Terrorism, which is similar but this form, CG 21 82, is used only with the Products/Completed Operations Liability Coverage Part). It can also be attached when CG 21 76 (Exclusion of Punitive Damages Related to a Certified Act of Terrorism) or CG 21 84 (Exclusion of Certified Acts of Nuclear, Biological, Chemical, or Radiological Acts of Terrorism; Cap on Losses from Certified Acts of Terrorism) are attached.
• Disclosure: The Terrorism Risk Insurance Program Reauthorization Act requires insurers to make certain disclosures to policyholders regarding terrorism coverage and its limitations. This endorsement is part of that compliance.

Key information for agents and underwriters

• Risk Assessment: Underwriters need to assess the insured's specific terrorism exposure to determine an appropriate aggregate limit if this endorsement is used to provide a sub-limit. Factors include location, industry, size of operations, and potential for mass casualties or significant property damage.
• Clarity for Insureds: Agents must clearly explain to insureds how this endorsement limits coverage for certified acts of terrorism, including the specific aggregate limit shown in the schedule and the overarching TRIA cap. It's crucial the insured understands this is a limitation, not a grant of coverage.
• Pricing: The premium charged for terrorism coverage will reflect the limits provided. The use of this endorsement to set a specific, potentially lower, aggregate limit for terrorism losses can impact pricing.
• Compliance: Ensure all TRIA-related disclosure requirements are met when this endorsement is used.
• Distinction from CG 21 80: While similar to CG 21 80, form CG 21 82 is specifically used with the Products/Completed Operations Liability Coverage Part, whereas CG 21 80 is available for the Commercial General Liability Coverage Part. It can be offered if the insured rejects the full coverage provided by CG 21 70.