1. Forms
2. CG
3. CG-99-03

Form CG 99 03: Terrorism Risk Insurance Act Of 2002, As Amended (TRIA) - Commercial General Liability

1. What the Form Is

Form CG 99 03 is an endorsement to a Commercial General Liability (CGL) policy designed to address coverage for acts of terrorism as defined under the Terrorism Risk Insurance Act of 2002 (TRIA) and its subsequent amendments and reauthorizations. Its primary purpose is to stipulate how the CGL policy responds to "certified acts of terrorism," which are acts certified by the Secretary of the Treasury in concurrence with the Secretary of State and the Attorney General. This endorsement clarifies the policy's interaction with the federal terrorism insurance backstop program, which involves a system of shared public and private compensation for specified insured losses resulting from certified acts of terrorism. Depending on its specific edition and the prevailing regulatory landscape, this endorsement might have been used to either provide the mandatory offer of terrorism coverage or to define the terms of such coverage if accepted by the insured.

2. Classes of Business It Applies To

The TRIA endorsement, as represented by CG 99 03, applies broadly across most commercial lines of insurance, including Commercial General Liability. Therefore, it is relevant to a wide array of industries and business types that purchase CGL coverage. Real-world examples include, but are not limited to:

• Real Estate: Owners and managers of commercial buildings such as office towers, shopping centers, and large residential complexes. For instance, a high-rise office building in a major city would have this endorsement to define its terrorism coverage.
• Hospitality: Businesses like hotels, motels, resorts, and restaurants that could be targets or suffer significant business interruption. A large hotel chain would need this clarification for its CGL policy.
• Retail Operations: From large department stores to smaller retail outlets, especially those in concentrated shopping areas.
• Manufacturing and Industrial: Factories, processing plants, and other industrial facilities.
• Construction: Contractors and construction projects, particularly those involving significant infrastructure or high-profile structures.
• Public Venues: Stadiums, convention centers, and entertainment venues that attract large crowds.
• Educational Institutions: Schools, colleges, and universities.

Essentially, any commercial entity seeking CGL coverage would encounter this type of endorsement to address the TRIA requirements.

3. Special Considerations

• Mandatory Offer of Coverage: Under TRIA, insurers are required to make coverage available for losses arising from certified acts of terrorism, on terms that do not differ materially from those applicable to losses from other types of events. This endorsement is a mechanism to fulfill that obligation for CGL policies.
• "Certified Acts" Trigger: The federal backstop and the specific provisions of TRIA apply only to acts certified as terrorism by the federal government. Losses from events not meeting this certification (e.g., falling below the $5 million aggregate damage threshold for certification) might be treated differently under the policy, potentially subject to other exclusions or limitations.
• Disclosure Requirements: Insurers must provide clear and conspicuous disclosure to policyholders regarding the premium charged for terrorism coverage and the existence of the federal share of compensation. While CG 99 03 defines coverage aspects, separate notice forms (e.g., IL 09 85) often accompany it to meet these disclosure mandates.
• Federal Program Cap: Policyholders should be aware that TRIA includes a cap on the total federal government and insurance industry liability for a certified act of terrorism (e.g., $100 billion in a calendar year). If this cap is exceeded, coverage could be pro-rated or reduced.
• Interaction with Other Exclusions: The CGL policy may contain other exclusions, such as for nuclear, biological, chemical, or radiological (NBCR) events. The interplay between these exclusions and TRIA coverage can be complex, although TRIA places limits on how broadly certified acts can be excluded. For example, an act of terrorism involving a nuclear device might still be subject to a nuclear hazard exclusion in the policy, despite TRIA.
• State Requirements: While TRIA is federal law, states may have their own regulations concerning terrorism coverage, particularly for non-certified acts or specific lines of insurance.
• Related Forms (e.g., IL 02 75): Form IL 02 75 pertains to Texas-specific cancellation and nonrenewal provisions. While listed as related, its primary function is to ensure the policy adheres to Texas administrative rules, which