1. Forms
2. CG
3. CG-22-79

Form CG 22 79: Exclusion – Contractors – Professional Liability

1. What the form is

The CG 22 79 endorsement is used with a Commercial General Liability (CGL) policy to exclude coverage for "bodily injury," "property damage," or "personal and advertising injury" that arises from professional services. Specifically, it applies when the insured contractor either performs engineering, architectural, or surveying services for others, or hires independent professionals to perform these services in connection with their own construction projects. The form defines professional services to include activities like preparing or approving maps, shop drawings, opinions, reports, surveys, field orders, change orders, or drawings and specifications. It also includes supervisory or inspection activities related to architectural or engineering services. Importantly, this endorsement clarifies that "professional services" do not include the "construction means, methods, techniques, sequences and procedures" employed by the contractor in their capacity as a construction contractor. This carve-back is a key differentiator from broader professional liability exclusions like the CG 22 43.

2. Classes of business it applies to

This endorsement is primarily intended for contractors, particularly those involved in:

• Design-Build Projects: Contractors who undertake both the design and construction aspects of a project. For example, a company hired to design and build a new office complex would fall into this category.
• Contractors Providing Incidental Professional Services: General contractors or subcontractors who may perform some level of design, engineering, or surveying work as part of their construction services, or who hire out these services. An example would be a general contractor who prepares shop drawings or a contractor who hires a surveyor for a specific phase of a project.
• Construction Management: While this endorsement might be considered, firms heavily involved in construction management, pre-construction consulting, or extensive design-build services may find this endorsement insufficient to address all their professional liability exposures.

3. Special considerations

• Interaction with Professional Liability (E&O) Insurance: The CG 22 79 is designed to clarify the CGL policy's scope and highlight the need for a separate Contractors Professional Liability (CPrL) or Errors and Omissions (E&O) policy. The CGL policy, even with this endorsement, typically only covers bodily injury and property damage, while a CPrL policy can cover economic losses arising from professional services. This endorsement helps to create a better "fit" between the CGL and E&O policies.
• "Means and Methods" Carve-Back: A significant feature of CG 22 79 is that it does not exclude liability arising from the contractor's "construction means, methods, techniques, sequences and procedures." This is a major improvement over broader exclusions like CG 22 43, as it preserves coverage for traditional contracting operations. For instance, if a claim arises from how a contractor physically executed the work (e.g., shoring techniques), it may still be covered under the CGL, even if some incidental design was involved in planning that execution.
• Limitations: While less restrictive than some other professional liability exclusions, CG 22 79 still has limitations. It may not adequately cover all professional exposures, especially for firms with significant design or construction management roles. Economic damages like acceleration costs or delay damages due to professional errors are generally not covered by the CGL and would require a CPrL policy.
• Subcontracted Professional Services: The exclusion applies to professional services rendered by the insured or on their behalf by independent professionals. This means if a contractor hires an engineering firm and an error by that firm leads to bodily injury or property damage, this exclusion could apply to the contractor's CGL policy.
• Alternative to Broader Exclusions: CG 22 79 is often considered a less restrictive alternative to the CG 22 43 (Exclusion – Engineers, Architects or Surveyors Professional Liability). If a contractor has CG 22 43 attached to their CGL and performs any professional services, it's advisable to try and replace it with CG 22 79 or CG 22 80 and explore CPrL coverage.

4. Key information for agents and underwriters

• Risk Assessment: Underwriters need to carefully assess the extent of the contractor's professional service activities. If the contractor performs substantial design work or offers extensive pre-construction consulting, this endorsement alone may not be sufficient, and a dedicated CPrL policy is likely necessary.
• Pricing: The use of this endorsement might influence the pricing of the CGL policy, reflecting the retained "means and methods" exposure versus a broader professional liability exclusion.
• Coverage Gaps: Agents should counsel contractor clients that this endorsement creates a clear exclusion for many professional services, emphasizing the potential coverage gap if a separate CPrL policy is not in place. It's a mistake for policyholders to view the "means and methods" exception as granting professional liability coverage; it merely narrows the scope of what's excluded from the CGL.
• Underwriting Guidelines: Insurers will have specific underwriting guidelines regarding when to use CG 22 79 versus other professional liability endorsements like CG 22 43 or CG 22 80 (Limited Exclusion – Contractors – Professional Liability). CG 22 80 is similar but typically applies when the contractor provides or hires professionals for their own work, and notably, its exclusion does not apply to construction work performed by or on behalf of the insured, making it potentially less restrictive for design-build contractors.
• Clarity is Key: The primary benefit of CG 22 79 is to clarify that the CGL is not intended to cover most professional liability exposures for contractors, while preserving coverage for their core construction activities (means and methods). This helps avoid disputes over whether a claim falls under the CGL or requires a separate professional liability policy.
• GCs Performing No Work: This endorsement may provide little to no coverage for General Contractors who subcontract all work and do not perform any physical construction themselves. However, if their subcontractor has CG 22 79 on their CGL and provides additional insured status to the GC, the GC might gain some level of protection.