1. Forms
2. CX
3. CX-00-01

What the Form Is

The ISO Commercial Excess Liability Coverage Form, CX 00 01, is designed to provide an additional layer of liability insurance for businesses, sitting above the limits of their primary, or "controlling underlying insurance," policies listed in the Declarations. Unlike an umbrella policy (such as the ISO CU 00 01), which may offer broader coverage or cover exposures not included in the underlying policies, the CX 00 01 is typically a "follow-form" policy. This means it generally adopts the same provisions, exclusions, and limitations as the applicable underlying insurance. However, the CX 00 01 specifies that its coverage will not be broader than that provided by the controlling underlying insurance, and if provisions conflict, the terms of the CX 00 01 will apply.

Classes of Business It Applies To

The CX 00 01 is utilized by a wide array of commercial enterprises that require liability limits beyond what their primary general liability, auto liability, or employers liability policies offer. While applicability is broad, examples of industries and business types that often utilize this type of excess coverage include:

• Auto Services: Repair shops, auto dealers (franchise/non-franchise), tire dealers, towing and salvage operations.
• Commercial Contractors: Businesses involved in electrical work, HVAC, janitorial services, masonry, metal erection, plumbing, and street/road construction (excluding bridge or highway work).
• Mercantile and Manufacturing: Companies dealing with building materials, food products, and metal goods.
• Real Estate: Owners and managers of apartment buildings, commercial real estate developments, hotels/motels, and warehouses.
• Retail: Construction/farm equipment dealers, grocery stores/supermarkets, and various types of restaurants.
• Specialty Auto Risks: Beverage distributors, concrete mixed in transit operators, moving and storage companies, sand and gravel haulers, and scrap metal dealers.

Special Considerations

• Strict Follow-Form Nature: The core principle of this form is its adherence to the terms of the "controlling underlying insurance." Coverage under the CX 00 01 is generally contingent upon the underlying policy covering the loss. It will not extend coverage to claims excluded by the primary policy.
• No Broadening of Coverage: A critical point is that this form does not provide broader coverage than the underlying policies. If there's a gap in the primary insurance, the CX 00 01 will not typically fill that gap.
• Underlying Limits Must Be Exhausted: The CX 00 01 responds only after the limits of the applicable underlying insurance have been used up by the payment of claims.
• Bankruptcy of Underlying Insurer: The bankruptcy or insolvency of an underlying insurer does not mean the CX 00 01 will drop down and provide primary coverage. The excess policy will apply as if the underlying insurance were still in full effect and recoverable.
• Defense Costs: The form outlines that the insurer has the right and duty to defend the insured against a suit seeking damages covered by the policy, but typically only when the limits of the controlling underlying insurance have been exhausted.
• Non-Standard Usage: While an ISO form, many insurers may use their own proprietary excess liability forms or significantly modify the CX 00 01 with endorsements. It's essential to read the entire policy carefully.

Key Information for Agents and Underwriters

• Underlying Policy Scrutiny: Given the follow-form nature, a thorough review and understanding of all underlying policies is paramount for assessing the true scope of the excess coverage. The quality and breadth of the primary coverage directly impact the excess layer.
• Accurate Scheduling: The Declarations page must accurately list all "controlling underlying insurance" policies, including their limits. If a sublimit in an underlying policy is intended to be covered by the excess policy, it must be specified in the Declarations.
• Identifying Coverage Gaps: Agents must clearly communicate to insureds that the CX 00 01 is not a solution for deficiencies or exclusions in their primary coverage. It provides higher limits for covered claims, not broader coverage.
• Distinction from Umbrella Policies: It is crucial to differentiate the CX 00 01 from a commercial umbrella policy (e.g., CU 00 01). Umbrella policies may offer broader coverage, respond to claims not covered by underlying insurance (often subject to a self-insured retention), and have their own set of terms and conditions that may differ significantly from a strict excess form. The CX 00 01 is generally more restrictive. For instance, the CU 00 01 form is significantly longer and contains more exclusions because it defines its own coverage scope more broadly, whereas the CX 00 01 relies more heavily on the underlying policies' terms.
• Endorsements: Pay close attention to any endorsements attached to the CX 00 01, as these can alter its provisions. For example, endorsements like the CX 24 33 (Noncontributory—Other Insurance Condition) can modify how the policy interacts with other insurance.