The Seven Deadly Endorsements – Part 3 General Liability Endorsements That Are Bad For Contractors

Endorsements #3 – The CG 22 94

The CG 22 94 is one of the most complicated endorsements in contractors liability insurance.  To understand this endorsement, you must first understand the standard “Your Work” exclusion in the ISO CG 00 01 policy.  A standard general liability policy states that damage resulting from your work is covered, but damage to your work is excluded.  For example, a general contractor builds a fence. The damage to the fountain is covered, but the cost to rebuild the fence is not. 

The exclusion reads as follows:

As you can see, the exception to the exclusion is work performed on your behalf by a subcontractor.   With this exception, work completed by a subcontractor is not considered “your work”.   Consequently, if the same fence was built by the insured’s subcontractor, there may be coverage under the general contractor’s policy for both the fountain and the fence. 

The CG 22 94 removes the exception to the exclusion. 

So, as a result, if the general contractor’s policy has a CG 22 94 endorsement, he would have no coverage for the damage to either the fountain or the fence. 

The experts at Orr & Associates know construction insurance.  We can review your current policies to help you find dangerous endorsements like the CG 22 94.  We provide you with the tools you need to make the right decisions about your insurance.  For more information, please contact Tarah Gruber at 619-487-0376 or Tarah@redhotinsurance.net.  Or visit www.redhotinsurance.net. 

Check in tomorrow to read about endorsement #4.