What the form is
The CU 21 75 Exclusion - Insurance And Related Operations endorsement is an Insurance Services Office (ISO) form used with Commercial Liability Umbrella (CU) policies. Its primary purpose is to eliminate coverage for liability stemming from the professional services, advice, or operational duties of an insured engaged in insurance and related operations. This includes, but is not limited to, the actions of insurance agents or brokers, and any supervisory roles connected to these activities. The exclusion clarifies that the umbrella policy is not intended to cover errors and omissions exposures inherent in the business of insurance.
Classes of business it applies to
This endorsement is specifically designed for insureds who are involved in the insurance industry. Examples include:
- Insurance agencies
- Insurance brokers
- Insurance consultants
- Managing General Agents (MGAs)
- Third-Party Administrators (TPAs) if their services are insurance-related
For instance, if an insurance agency is sued because an agent failed to procure the correct type or amount of coverage for a client, leading to an uncovered loss for that client, this exclusion on the agency's Commercial Umbrella policy would typically prevent the umbrella from responding to that claim. Such a claim would be expected to be covered by the agency's separate Errors & Omissions (E&O) liability policy.
Special considerations
It is crucial that this endorsement is used consistently with the underlying insurance. Specifically, if the underlying Commercial General Liability (CGL) policy contains an endorsement like CG 22 48 (Exclusion – Insurance And Related Operations), the CU 21 75 should also be attached to the umbrella policy. This alignment prevents potential conflicts or unintended coverage scenarios where the umbrella might drop down to cover something excluded by the primary layer.
The 04 13 edition of this form, along with other professional services exclusion endorsements, was revised to specifically address claims alleging negligence or other wrongdoing in the hiring, employment, training, supervision, or monitoring of others by any insured within the context of providing insurance and related operations. This reinforces the intent to exclude such professional liability claims broadly.
Key information for agents and underwriters
For Agents: When placing coverage for clients in the insurance business, agents must be aware of this exclusion and ensure that the client has appropriate Professional Liability (E&O) coverage in place. The CU 21 75 on the umbrella emphasizes the need for robust, standalone E&O coverage for their insurance-related professional exposures.
For Underwriters:
- Risk Assessment: The primary consideration is whether the applicant is engaged in insurance or related operations. If so, this exclusion is generally standard to apply to the Commercial Umbrella policy.
- Underlying Coverage Review: Underwriters should verify that a similar exclusion (e.g., CG 22 48) is present on the underlying CGL policy to maintain consistency.
- E&O Verification: While the umbrella excludes this exposure, underwriters may still want to confirm that the insured carries separate E&O coverage, as this indicates a better-managed risk overall, even though the umbrella won't cover those specific E&O claims.
- Pricing: The application of this exclusion means the umbrella policy is not taking on the professional liability risk of the insurance operations. This should be factored into the umbrella premium, as it represents a significant reduction in exposure for the umbrella carrier.
- Coverage Gaps: Ensure the insured understands that this endorsement creates a clear boundary, and their E&O policy is the proper place for coverage related to their professional services in the insurance field.