1. Forms
2. CG
3. CG-21-92

What the form is

The CG 21 92, titled "Limitation Of Coverage For Terrorism On An Annual Aggregate Basis," is an endorsement to the Commercial General Liability (CGL) Coverage Part. Its primary purpose is to establish a specific, lower limit of liability (a sub-limit) for damages or injuries arising from an "act of terrorism" as defined in the endorsement. This sub-limit is applied on an annual aggregate basis, meaning it's the maximum the insurer will pay for all terrorism-related claims during a policy year, regardless of the number of incidents. This endorsement is used in conjunction with policies that provide terrorism coverage, often in the context of the Terrorism Risk Insurance Act (TRIA).

Classes of business it applies to

This endorsement can be applied to virtually any class of business that carries a Commercial General Liability policy and has an exposure to terrorism risks. It is not industry-specific but rather depends on the insurer's assessment of terrorism risk and the insured's desire or need for terrorism coverage with a specific aggregate limit. Examples include:

• Real estate owners and property managers (commercial buildings, shopping centers)
• Hospitality businesses (hotels, restaurants)
• Public venues (stadiums, theaters)
• Transportation and logistics companies
• Manufacturing and industrial facilities
• Any business located in an area perceived to be at higher risk of terrorism.

Special considerations

Key considerations for the CG 21 92 endorsement include:

• TRIA Context: This endorsement often works in relation to the Terrorism Risk Insurance Act (TRIA) and its subsequent reauthorizations. TRIA provides a federal backstop for insurance losses from certified acts of terrorism. This endorsement can be used to manage an insurer's exposure below or outside of the TRIA mechanism for certain defined acts of terrorism.
• Scheduled Sub-Limit: The effectiveness of this endorsement hinges on the specific annual aggregate limit shown in the endorsement's schedule. This limit must be clearly stated.
• Definition of Terrorism: The endorsement will contain a specific definition of what constitutes an "act of terrorism" for the purpose of this limitation. This definition is crucial and may differ from other policy definitions or governmental definitions.
• CGL Specific: It is explicitly stated that this endorsement is available only with the Commercial General Liability Coverage Part.

For example, if a CGL policy has a general aggregate limit of $2,000,000, the CG 21 92 could be attached with a scheduled annual aggregate limit of $500,000 for terrorism. This means that while the policy provides up to $2,000,000 for other covered losses, the maximum it would pay for all terrorism-related claims in that policy year is $500,000.

Key information for agents and underwriters

For Agents:

• Clearly explain to the insured how this endorsement limits their terrorism coverage to the specified annual aggregate amount.
• Discuss the definition of "act of terrorism" used in the endorsement.
• Ensure the insured understands that this limit is an aggregate for the entire policy year.
• Document the discussion and the insured's acceptance of this limitation.

For Underwriters:

• Assess the insured's terrorism exposure to determine if this endorsement is appropriate and what the aggregate limit should be.
• Ensure the scheduled limit is clearly indicated on the endorsement.
• Verify that the endorsement is correctly attached to a Commercial General Liability Coverage Part.
• Understand how this endorsement interacts with any TRIA-related coverage or other terrorism endorsements on the policy. For instance, this endorsement might be used for policies providing terrorism coverage because of TRIA, becoming active if TRIA expires.
• Be aware of state-specific rules or regulations that might impact the use of terrorism endorsements.