1. Forms
2. CG
3. CG-24-56

What the form is

The CG 24 56 endorsement, titled "Excess Insurance Provision – Order Of Response – When You Are An Additional Insured On Other Insurance," is designed to amend the "Other Insurance" condition found in the standard Commercial General Liability (CGL) coverage form. Its primary function is to clarify the order in which policies respond when the named insured on the CGL policy is also covered as an additional insured under a separate insurance policy for the same occurrence or offense. By adding this endorsement, the named insured's CGL policy is designated to respond as excess insurance over the other policy on which they are an additional insured.

Classes of business it applies to

This endorsement is particularly relevant for businesses that frequently find themselves in situations where they are named as an additional insured on another entity's policy, or conversely, where they add others as additional insureds and want to ensure their own policy's response is clearly defined. Common scenarios include:

• Construction: A general contractor is often named as an additional insured on a subcontractor's CGL policy. If the general contractor has the CG 24 56 endorsement on their own CGL policy, their policy will be excess to the subcontractor's policy for a claim where the general contractor qualifies as an additional insured.
• Landlord/Tenant Agreements: A property owner (landlord) might be named as an additional insured on a tenant's liability policy.
• Contractual Agreements: Any business relationship where one party agrees to provide insurance coverage for another party as an additional insured can benefit from the clarity this endorsement provides regarding the order of coverage.

Special considerations

The CG 24 56 endorsement plays a crucial role in coordinating coverage and preventing disputes over which policy should respond first. Key considerations include:

• Interaction with Primary and Noncontributory Endorsements: This endorsement works in conjunction with additional insured endorsements on other policies, especially those that provide coverage on a "primary and noncontributory" basis. For example, if a subcontractor's policy is endorsed to be primary and noncontributory for the general contractor (as an additional insured), and the general contractor's CGL policy includes the CG 24 56, it reinforces that the subcontractor's policy must exhaust before the general contractor's CGL policy responds.
• Contractual Requirements: Contracts often dictate insurance requirements, including the order of coverage. This endorsement can help insureds meet contractual obligations that require their own insurance to be excess when other insurance is available to them as an additional insured.
• Clarity in Complex Claims: In situations involving multiple insureds and multiple policies, the CG 24 56 can simplify the determination of how each policy contributes, aiming for a vertical exhaustion of limits.

Key information for agents and underwriters

Agents and underwriters should consider the following:

• Risk Assessment: For underwriters, the presence of this endorsement clarifies that the policy is less likely to be the primary responder when the insured is an additional insured on another policy for the same loss. This can affect the overall risk assessment.
• Coverage Analysis for Agents: Agents should identify clients who are frequently involved in contractual agreements requiring them to be named as additional insureds or vice-versa. Recommending this endorsement can prevent future coverage disputes and ensure the client's insurance program responds as intended.
• Avoiding Gaps and Overlaps: Understanding how this endorsement interacts with other policy provisions, such as additional insured endorsements and "other insurance" clauses in various policies, is critical to avoid unintended gaps or overlaps in coverage.
• No Direct Premium Impact (Typically): While this endorsement clarifies the scope of coverage, it doesn't usually have a direct premium charge associated with it. However, its application helps in accurately defining the exposure covered by the policy.