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3. CG-23-01

Form CG 24 09 - Governmental Subdivisions

1. What the form is

The CG 24 09 Governmental Subdivisions endorsement modifies the standard Commercial General Liability (CGL) coverage form (like CG 00 01) for governmental entities. Its primary functions are twofold:

• It broadens the definition of "Who Is An Insured" to specifically include elected or appointed officials, and members of boards or commissions of the named governmental subdivision, but only while acting within the scope of their duties for the governmental entity.
• It clarifies the definition of "mobile equipment" versus "auto" in the context of governmental operations. Specifically, it addresses vehicles used on public roads, ensuring that such vehicles are treated as "autos" (and thus typically excluded from CGL coverage for liability arising from their use, which should be covered under a commercial auto policy) rather than potentially being misconstrued as "mobile equipment" simply because they are operated on property the governmental entity owns (like city streets).

2. Classes of business it applies to

This endorsement is specifically designed for and used with policies issued to various types of governmental subdivisions. Real-world examples include:

• Municipalities (cities, towns, villages)
• Counties
• Townships
• Special purpose districts (e.g., park districts, water districts, library districts)
• Other local governmental bodies

Essentially, any public entity that requires general liability coverage and needs to ensure its officials and board members are considered insureds for their official duties, and requires clarity on the auto/mobile equipment distinction, would utilize this form.

3. Special considerations

• Sovereign Immunity: While this form clarifies who is an insured, it does not inherently waive sovereign immunity. Other endorsements, such as CG 24 14 (Waiver Of Governmental Immunity), would be used if the governmental entity intends to waive immunity as a defense for certain claims. The application and extent of sovereign immunity vary significantly by state and the specific circumstances of a claim.
• Scope of Duties: Coverage for officials and board members is typically limited to liability arising out of their official duties performed on behalf of the governmental entity. Acts outside this scope may not be covered.
• Auto Coverage Imperative: The clarification regarding "autos" underscores the importance for governmental entities to maintain adequate Commercial Auto coverage. Relying on the CGL for incidents involving vehicles that meet the definition of an "auto" would likely result in a coverage gap.
• Statutory Requirements: Governmental entities often operate under specific statutes that may dictate insurance requirements or affect liability. This endorsement helps tailor the CGL policy to better fit the unique nature of public entities, but it must be considered alongside applicable laws.

4. Key information for agents and underwriters

• Risk Assessment: Underwriters should carefully assess the scope of operations of the governmental entity. The inclusion of officials and board members means their actions (within their duties) can lead to claims under the policy. Understanding the entity's governance, decision-making processes, and loss history is crucial.
• Pricing: The broadening of "Who Is An Insured" might be a factor in pricing, although it is a standard endorsement for this class of business. The primary rating basis will still likely be driven by the entity's exposures (e.g., population served, services provided, premises owned).
• Coverage Gaps: Agents should emphasize the auto exclusion and ensure the governmental entity has appropriate Commercial Auto coverage. Other specialized coverages, like Public Officials Errors & Omissions (often a separate policy), are also critical and are not covered by the CGL or this endorsement.
• Underwriting Guidelines: Underwriters will look for well-managed entities with clear operational guidelines and risk management practices. The types of services provided (e.g., law enforcement, public works, recreational facilities) will significantly influence the underwriting assessment. They will also be interested in how the entity handles claims and its approach to sovereign immunity.
• Relationship to CG 00 01: This endorsement amends the CG 00 01. All other provisions of the CG 00 01 (or other CGL form used) remain applicable unless specifically modified by this or other endorsements. It's vital to read the entire policy to understand the full scope of coverage.