1. Forms
2. CG
3. CG-22-70

Form CG 22 70: Real Estate Property Managed

1. What the form is

The CG 22 70, titled "Real Estate Property Managed," is an endorsement to the standard Commercial General Liability (CGL) Coverage Part (e.g., CG 00 01). Its primary purpose is to modify the CGL policy for insureds who manage real estate properties for others. This endorsement specifically addresses the unique liability exposures faced by property managers. It alters the CGL in two significant ways:

• It adds an exclusion under Coverage A (Bodily Injury and Property Damage Liability) for "property damage" to property that the insured operates, manages, or for which they act as an agent for rent collection or in any other supervisory role. This means if the property manager (the insured) negligently causes damage to the property they are managing, their CGL policy with this endorsement will not cover that damage.
• It modifies the "Other Insurance" condition in the CGL policy. With respect to liability arising from the insured's management of property for others, the insurance provided by this policy becomes excess over any other valid and collectible insurance available to the property manager, whether that other insurance is primary or excess. This means the property owner's insurance would typically apply first to a covered loss.

2. Classes of business it applies to

This endorsement is specifically designed for businesses engaged in real estate property management. This includes:

• Residential Property Managers: Companies managing apartment complexes, single-family rental homes, condominium associations, or homeowners associations on behalf of the owners. For example, if a tenant slips and falls due to alleged negligence in maintaining a common area managed by the insured property management firm, this endorsement would be relevant to how their CGL policy responds.
• Commercial Property Managers: Firms that manage office buildings, retail centers, industrial parks, or other commercial properties for their owners. For instance, if a visitor is injured due to a poorly maintained walkway at a shopping center managed by the insured, this endorsement clarifies the property manager's CGL coverage in relation to the property owner's insurance.
• The endorsement is often required when the General Liability Class Code 47052 (Property Management) is used.

3. Special considerations

There are several important points to consider when using or encountering the CG 22 70 endorsement:

• Exclusion of Damage to Managed Property: The most significant impact for the insured property manager is the exclusion of coverage for property damage to the properties they manage. This means the property manager cannot rely on their CGL policy to cover their liability for physical damage they cause to the buildings or grounds they are paid to oversee. For example, if a property manager's employee negligently causes a fire that damages an apartment building they manage, the CG 22 70 would exclude coverage for the damage to that building under the property manager's CGL. The property owner's property insurance would typically be expected to cover this, though the owner's insurer might then subrogate against the property manager.
• Excess Coverage Provision: The endorsement makes the property manager's CGL coverage excess over the property owner's insurance for liability arising out of the property management activities. This reinforces the idea that the property owner's policy should be the primary source of coverage for incidents occurring on their property. For example, if a guest is injured at a managed property and both the property owner and property manager are found liable, the property owner's CGL policy would generally pay first, and the property manager's CGL (with the CG 22 70) would only contribute if the owner's policy limits were exhausted.
• Relationship with CG 00 01: The CG 22 70 modifies the standard CGL coverage form (CG 00 01). It does not stand alone and must be attached to a CGL policy.
• Professional Liability: It's crucial to understand that the CGL policy, even with this endorsement, does not typically cover professional errors and omissions (E&O) of a property manager. For example, wrongful eviction, discrimination, or failure to properly screen tenants are exposures that would generally require a separate Professional Liability or E&O policy. The CG 22 70 does not fill this gap.

4. Key information for agents and underwriters

Agents and underwriters should be mindful of the following when dealing with the CG 22 70:

• Risk Assessment: The use of this endorsement highlights that the insured is managing property owned by others. Underwriters will need to assess the types of properties managed (residential, commercial), the number of units, the contractual agreements between the property manager and the property owners (especially regarding insurance and indemnification), and the property manager's experience and risk management practices.
• Pricing: The fact that this endorsement makes the CGL excess for property management liabilities and excludes damage to managed property might influence pricing. The premium may reflect a somewhat reduced risk compared to a CGL policy without this endorsement, as the primary burden for certain losses is shifted to the property owner's insurance.
• Coverage Gaps: Agents should counsel property manager clients about the exclusion for damage to property they manage and the need for the property owners to maintain adequate property insurance. Furthermore, the need for separate Professional Liability (E&O) insurance is a critical discussion point, as the CGL with CG 22 70 does not cover professional services errors.
• Contractual Requirements: Agents should review property management agreements to ensure the insurance provisions align with the coverage provided by the CGL and this endorsement. For example, if the property manager is contractually obligated to carry primary insurance for certain risks, the CG 22 70's excess provision could create a conflict.
• Reinforcement of Intent: Revisions to the CG 22 70 endorsement (e.g., the 04 13 edition) have aimed to reinforce that the property manager's insurance is excess over any other valid and collectible insurance, whether that other insurance is primary or excess. This clarifies the priority of coverage.