WHATS NEW ISO Form Changes Commercial General Liability ...

1 WHATS NEW. ISO Form Changes Commercial General Liability Form Effective Date (4/13). Materials are copy written by Insurance Services Office, Inc., In April of 2013 the ISO modified the Commercial Property Forms. It was one of the biggest Changes in forms that we have seen in years with the majority of forms taking on some type of change. Effective April 2013, many of the Commercial General Liability forms also have a new edition date. Some of the Changes are minor but carry new edition dates of existing form numbers and there are some forms that are first being introduced. It is a multistate revision and some of the specific state forms have also taken a change or introduced new forms. Some of the ISO Changes have already been adopted in insurance company forms while other Changes represent clarification of the intent of the form.

2 There are new multistate endorsements that are being introduced: Primary And noncontributory Other Insurance Condition Endorsement Additional Insured Owners, Lessees or Contractors Automatic Status for Other Parties When Required in Written Construction Agreement Total Pollution Exclusion For Designated Products Or Work Endorsement Liquor Liability Bring Your Own Alcohol Establishments Endorsement Amendment of Personal and Advertising Injury Definition Endorsement Designated Location(s) Aggregate Limit Endorsement Specifically we will highlight those Changes that have any significant impact and new endorsements to the form series. It goes without saying that any form that narrows coverage requires that we notify our insureds to avoid any gap in coverage as they renew on the new CGL.

3 Edition date. All of these Changes will be discussed in more detail in the Insurance Community class on March 19th. LINK. Liquor Liability Form Revisions One of the areas that has taken on a significant change is in the area of Liquor Liability . There are several forms that have taken the new edition date including: 1|Page Liquor Liability Coverage Form CG 00 33 04 13. Liquor Liability Coverage Form CG 00 34 04 13. Amendment Of Liquor Liability Exclusion CG 21 50 04 13. Amendment Of Liquor Liability Exclusion - Exception For Scheduled CG 21 51 04 13. Premises Or Activities Liquor Liability - Bring Your Own Alcohol Establishments CG 24 06 04 13. NEW. Amendment Of Liquor Liability Exclusion CG 29 52 04 13. Amendment Of Liquor Liability Exclusion - Exception For Scheduled CG 29 53 04 13.

4 Premises Or Activities As with most Liability Changes there is case law that gives rise to the need for clarification and form revision. Some of the specific court cases relating to this change are: PENN-AMERICA v. PECADILLOS, INC. ( (2011) Superior Court of Pennsylvania;. McGuire v. Curry and Park Jefferson Speedway, Inc., a South Dakota Corporation (766 N. W. 2d 501 (2009);. SIMMONS V. HOMATAS (925 n. e. 2D 1089 (2010; 236 ill. 2D 459) Supreme Court of Illinois., to name a few. In the case of PENN-AMERICA v. PECADILLOS, INC. ( (2011) Superior Court of Pennsylvania, two customers entered the bar after visiting several other drinking establishment where they drank in excess. They continued to drink at Pecadillos; got further intoxicated; were asked to leave even though they were in no condition to drive.))))

5 The patrons left; caused an accident and killed to individuals and injured two others. The insured argued that the allegations in the underlying action against them fell outside the related CGL policy's liquor Liability exclusion. The court ruled that a duty to defend was triggered when an insured was alleged to have continued to serve intoxicated patrons and then ejected them in a dangerously inebriated condition. The case of McGuire v. Curry and Park Jefferson Speedway, Inc., a South Dakota Corporation (766 N. W. 2d 501 (2009) a racetrack employer allowed an unsupervised, underage employee access to alcoholic beverages. The employee was a runner hired to deliver alcohol and other supplies to the racetrack's concession stands and bars.)

6 One day after the employee's shift ended, he drove his vehicle off the racetrack's premises while intoxicated and injured a pass ender on a motorcycle. The plaintiff's suit filed against the racetrack alleged negligent hiring, retention and supervision of an underage employee. The court concluded that the racetrack did have a duty to supervise the employee and to disallow access to alcoholic beverages. 2|Page In the last case, SIMMONS V. HOMATAS (et al On Stage Productions, Inc.,) (925 n. e. 2D. 1089 (2010; 236 ill. 2D 459) Supreme Court of Illinois, the Illinois court had to rule on whether a business that does NOT serve alcoholic beverages but allows patrons to bring in alcohol is considered in the business of selling alcoholic beverages.)

7 In this case the club, operated by Stage Productions, is a nude strip club that does not serve alcohol but allows its patrons to bring their own alcohol and sells them set ups providing glasses, mixers, ice, etc. Homatas and his companion brought in a fifth of rum and vodka and became intoxicated. They left the club; retrieved their car from valet parking; the valet parker opened the driver's door and told Homatas to leave the premises. Fifteen minutes later, Homatas collided with another vehicle resulting in the death of four individuals. The case had to deal with whether the business can be liable for injuries that arise, not as a result of serving alcohol, but as a result of actions in connection with allowing patrons to consume alcohol that they brought on the premise.

8 The court concluded that the plaintiff's common law claims were not preempted by the state's Dram Shop laws. The court went on to state that the business was not in the business of selling liquor even though they provided the set ups for the liquor that was brought in by the patrons. Due to these cases and others, the ISO has revised the Liquor Liability exclusion in the various GL coverage forms to clearly state that the Liquor Liability exclusion applies even if the claims against any insured allege the negligence or other wrongdoing in: The supervision, hiring, employment, training or monitoring of others; or Providing or failing to provide transportation with respect to any person that may be under the influence of alcohol.

9 If the occurrence which caused the bodily injury or property damage involved that which is described in Paragraph (1), (2) or (3) of the exclusion. There is further clarity that a Bring Your Own Alcohol Establishment (BYO) is not considered in the business of selling, serving or furnishing alcoholic beverages. There is a new endorsement available in the series that specifically deals with the BYO exposure titled: Liquor Liability Bring Your Own Alcohol Establishment. Pollution Form Revisions: There are a couple of forms relating to Pollution that have been modified with the 4/13 change including: Pollution Liability Coverage Form Designated Sites Cg 00 39 04 13. Pollution Liability Limited Coverage Form Designated Sites Cg 00 40 04 13.

10 3|Page Total Pollution Exclusion For Designated Products Or Work Cg 21 99 04 13. Pesticide Or Herbicide Applicator - Limited Pollution Coverage Cg 28 12 04 13. In the Pollution Liability Coverage Forms CG 00 39 and CG 00 40 the Aircraft, Auto, Rolling Stock or Watercraft exclusion is revised to clarify coverage as relates claims for negligence in the supervision, hiring, employment, training or monitoring of others when the claim involves injury or damage arising out the use of an automobile. This exclusion has been reviewed in prior form series including in 2000 and 2003. There is a new exclusionary endorsement introduced titled: Total Pollution Exclusion for Designated Products or Work CG. 21 99. This new endorsement is similar to the CG 21 98 except that it limits the applicability of the exclusion to the specific product or work described in the schedule on the endorsement.