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3. CG-27-11

Form CG 27 11: Basic Extended Reporting Period – Automatic For Other Canceled Or Renewed Claims-Made Coverages (Claims-Made Form)

1. What the form is

Endorsement CG 27 11 is designed for use with a Commercial General Liability (CGL) claims-made policy. Its primary purpose is to clarify and potentially modify the conditions under which the Basic Extended Reporting Period (BERP) applies. The BERP automatically provides a limited window of time after a claims-made policy expires to report claims for incidents that occurred during the policy period and after the retroactive date. This endorsement specifically addresses situations where other claims-made coverages the insured holds are canceled or renewed with different terms, ensuring that the BERP provisions of the CGL policy are clearly defined in these contexts. It is used in conjunction with the standard claims-made CGL form, CG 00 02.

2. Classes of business it applies to

This endorsement is relevant for any business that has a claims-made CGL policy and also maintains other claims-made policies, where the cancellation or renewal terms of those other policies could potentially create ambiguity or gaps in reporting periods. While not limited to specific industries, it is particularly pertinent for businesses with complex insurance portfolios or those operating in sectors where multiple claims-made policies are common. Examples include:

• Professional service firms: Such as architects, engineers, or consultants who might have separate professional liability (Errors & Omissions) policies on a claims-made basis in addition to their CGL. If their E&O policy is canceled or renewed with a different retroactive date, this endorsement helps clarify how the CGL's BERP will respond to general liability claims.
• Healthcare providers: Hospitals or large medical practices often have multiple claims-made policies (e.g., medical malpractice, healthcare general liability). If one of these policies changes, CG 27 11 can help ensure the CGL's BERP functions as intended for general liability exposures.
• Contractors: Particularly those involved in large projects or specialized work, who might have project-specific claims-made policies or pollution liability policies alongside their CGL. If a project-specific policy ends, this endorsement clarifies the CGL's BERP.

3. Special considerations

There are several important considerations when using endorsement CG 27 11:

• Interaction with other policies: The core function of this endorsement is to address the interplay between the CGL's BERP and other claims-made policies. It's crucial to understand the terms of all claims-made policies the insured carries.
• Triggering events: The BERP, and therefore this endorsement's modifications to it, is typically triggered by specific events such as policy cancellation, non-renewal, the insurer advancing the retroactive date, or replacing the claims-made policy with an occurrence policy.
• "Other Insurance" clauses: This endorsement may also interact with "Other Insurance" conditions within the CGL policy, especially if the insured is named as an additional insured on another policy. ISO has made revisions to clarify that a policy where an entity is a named insured is generally excess over a policy where they are an additional insured.
• Limitations of BERP: It's important to remember that the Basic Extended Reporting Period offers limited protection. It does not extend the policy period itself nor does it cover incidents that occur *after* the policy expires, even if the claim is made during the BERP. It also typically does not reinstate aggregate limits. For more comprehensive "tail" coverage, a Supplemental Extended Reporting Period (SERP) is usually required, which comes with an additional premium. Endorsement CG 27 11 specifically relates to the *Basic* ERP.
• Regulatory Landscape: While this is a standard ISO form intended for use in all states, specific state regulations or court interpretations could influence its application.

Real-world example: A manufacturing company has a claims-made CGL policy and a separate claims-made Pollution Liability policy. The Pollution Liability policy is non-renewed by its insurer. Endorsement CG 27 11 on their CGL policy would help clarify how the CGL's Basic Extended Reporting Period applies to general liability claims that might have an environmental aspect, ensuring there's no unintended gap or overlap due to the pollution policy's termination.

4. Key information for agents and underwriters

• Risk Assessment: Underwriters need to carefully assess the insured's entire claims-made insurance program. The presence of multiple claims-made policies increases the complexity and the potential for gaps if terms are not carefully coordinated. Understanding why other claims-made policies are being canceled or renewed differently is crucial.
• Coverage Gaps: Agents should be vigilant in identifying potential coverage gaps when an insured has multiple claims-made policies. This endorsement helps to clarify one aspect of potential gaps related to the BERP, but it doesn't solve all potential issues. The need for a Supplemental Extended Reporting Period (SERP) should always be evaluated when a claims-made policy terminates or its terms change significantly.
• Pricing: While the BERP itself is typically provided without an additional charge, the underlying exposures and the complexity introduced by other claims-made policies might indirectly influence the overall premium for the CGL. The premium for a SERP, if elected, can be up to 200% of the annual premium of the expiring claims-made policy.
• Underwriting Guidelines: Underwriters should review the insured's loss history across all relevant claims-made policies. They should also consider the stability of the insured's other carriers and the reasons for any policy cancellations or significant renewal changes. The attachment of this endorsement signals a need for a more holistic view of the insured's liability exposures and how they are managed across different policies.
• Clarity of Intent: This endorsement, like many ISO revisions, aims to clarify the policy's intent rather than fundamentally change coverage, though any modification can have an impact. It helps ensure that the BERP provisions are applied consistently even when other coverages change.