1. Forms
2. CU
3. CU-21-48

What the Form Is

The CU 21 48, titled "Extended Reporting Period For Terrorism Coverage," is an endorsement to the ISO Commercial Liability Umbrella Coverage Form. It is specifically designed for use with claims-made policies. Its primary function is to grant an extended period (a "tail") for reporting certain terrorism-related claims that occurred before the expiration or non-renewal of the Terrorism Risk Insurance Act (TRIA), in situations where conditional terrorism exclusions (like CU 21 44 or CU 21 45) are part of the policy. If TRIA is not renewed, those conditional exclusions would activate; this endorsement ensures that claims from acts of terrorism prior to such non-renewal still have a window to be reported.

Classes of Business It Applies To

This endorsement applies to any commercial insured that has a claims-made Commercial Liability Umbrella policy and is subject to conditional terrorism exclusions that depend on the status of TRIA. This can span various industries, particularly those with notable terrorism exposures or those required to maintain terrorism coverage, such as:

• Real estate owners and developers, especially of high-profile properties
• Businesses in major metropolitan areas
• Transportation and logistics companies
• Hospitality and entertainment venues
• Energy sector companies

Real-world example: A commercial real estate company owning several office towers has a claims-made umbrella policy with endorsement CU 21 44, which excludes terrorism if TRIA is not renewed. To protect against claims arising from a terrorist event that occurred before TRIA's potential non-renewal but reported after, the CU 21 48 endorsement would be added to provide a five-year window to report such claims.

Special Considerations

• Mandatory Attachment: This endorsement must be attached whenever endorsement CU 21 44 (Conditional Exclusion of Terrorism) or CU 21 45 (Conditional Exclusion of Terrorism Involving Nuclear, Biological or Chemical Terrorism) is added to a claims-made policy.
• TRIA Dependency: The utility of this endorsement is directly linked to the status of the Terrorism Risk Insurance Act. It addresses a potential coverage gap if TRIA is not extended or renewed.
• Reporting Period: It provides a five-year extended reporting period for those specific terrorism-related claims.
• Scope: The extended reporting period applies only to acts of terrorism that are excluded by CU 21 44 or CU 21 45 due to TRIA's non-renewal but happened before such non-renewal.

Real-world example: If TRIA is set to expire on December 31st and an insured has CU 21 44 on their claims-made umbrella policy, an act of terrorism occurring on December 15th might not be reported until January. Without CU 21 48, if TRIA is not renewed, the claim reported in January could be denied due to CU 21 44. With CU 21 48, there is a five-year period to report that December 15th event.

Key Information for Agents and Underwriters

• Agent's Role: Agents must clearly explain the interplay between TRIA, conditional terrorism exclusions like CU 21 44/CU 21 45, and the CU 21 48 endorsement to insureds with claims-made umbrella policies. It's crucial for managing client expectations regarding terrorism coverage, especially around TRIA renewal dates.
• Underwriting Guidelines: Underwriters should ensure that CU 21 48 is automatically included when CU 21 44 or CU 21 45 are endorsed onto a claims-made umbrella policy to prevent unintended coverage gaps for the insured.
• Risk Assessment: While this endorsement doesn't change the fundamental terrorism risk of an insured, it provides a mechanism for handling claims reporting if TRIA's status changes. The underlying terrorism exposure of the insured remains the primary driver for underwriting and pricing decisions related to terrorism coverage.
• Coverage Gaps: Failure to attach this endorsement when required (i.e., with CU 21 44 or CU 21 45 on a claims-made policy) could lead to significant uninsured losses for clients if TRIA is not renewed and a terrorism event occurs shortly before but is reported after the non-renewal.