1. Forms
2. CG
3. CG-21-99

What the Form Is

The CG 21 99, titled "Total Pollution Exclusion for Designated Products or Work," is an endorsement used with Commercial General Liability (CGL) and Products/Completed Operations Liability coverage forms. Its purpose is to specifically exclude coverage for 'bodily injury' or 'property damage' arising out of the actual, alleged, or threatened discharge, dispersal, seepage, migration, release, or escape of 'pollutants' that are related to particular products or work performed by or on behalf of the insured, as designated in the endorsement's schedule. This endorsement allows an insurer to carve out specific pollution exposures tied to certain aspects of an insured's operations, rather than applying a broader pollution exclusion to all operations.

Classes of Business It Applies To

This endorsement is typically used for businesses where specific products or completed operations present a significant pollution exposure that the insurer is unwilling to cover under standard terms. Examples include:

• Manufacturers or distributors of specific chemicals, paints, or other materials known to be pollutants.
• Contractors performing particular types of work with a high pollution potential, such as certain types of industrial cleaning, specific remediation work (if not otherwise covered by a specialized policy), or application of certain hazardous materials.
• Businesses whose specific past or current products/work have a known or suspected pollution liability associated with them. For instance, a company that previously manufactured a product now known to cause contamination could have this endorsement applied to exclude claims arising from that specific product.

Essentially, it's for insureds where the general operations might be acceptable, but a niche product or service carries an uninsurable pollution risk for the carrier.

Special Considerations

• Specificity is Key: The products or work to be excluded must be clearly and precisely described in the schedule of the endorsement. Ambiguity can lead to coverage disputes.
• Narrowing of Coverage: Attaching this endorsement results in a reduction of coverage for the designated products or work. It's crucial that the insured understands the scope of this exclusion.
• Comparison to CG 21 98: The CG 21 99 is similar to the CG 21 98 (Total Pollution Exclusion Endorsement). However, the CG 21 98 typically applies a total pollution exclusion to all of the insured's products or work. The CG 21 99 is more targeted, applying the exclusion only to what is scheduled. If this endorsement replaces a CG 21 98, it might be considered a broadening of coverage for products or work *not* scheduled on the CG 21 99, but it remains a strict exclusion for those that are.
• Regulatory Context: While the endorsement itself addresses insurance coverage, the underlying pollution exposures are often subject to significant environmental regulations (e.g., CERCLA). This endorsement limits the policy's response to liabilities that might arise under such regulations for the designated items.

Key Information for Agents and Underwriters

• Agents: Must clearly communicate the impact of this endorsement to the insured, ensuring they understand which specific products or completed operations will no longer have pollution coverage. Alternative risk transfer options, such as standalone pollution liability policies, might need to be discussed for the excluded exposures.
• Underwriters: Use this endorsement to manage specific, identifiable pollution risks associated with an account without declining the entire risk or applying a blanket pollution exclusion. It allows for more precise risk tailoring. The underwriter must carefully define the designated product(s) or work in the schedule. Pricing considerations will reflect the removal of this specific liability from the policy's scope. They should also consider if the remaining operations of the insured still present any residual pollution exposures that are acceptable or need further underwriting.
• Risk Assessment: A thorough understanding of the insured's operations, products, and materials used is essential before applying this endorsement to ensure it accurately targets the intended exposure.
• Coverage Gaps: Agents and insureds should be aware that this creates a significant coverage gap for pollution incidents arising from the designated products or work.