What Are Common Enhancements On a General Liability Policy?

Worldwide Coverage
Certain carriers can offer an endorsement which expands the territory of the policy. Base GL forms will generally only cover claims that are filed in a domestic jurisdiction (usually the US, its territories and possessions, Puerto Rico, and Canada). With this endorsement, a products liability claim that is filed overseas can be covered by the policy without the need for a full foreign package policy.
 
Additional Insured
Some third parties such as landlords and vendors will ask to be added as an additional insured (AI) to a company’s policy. Many policies include endorsements which provide automatic AI status to third parties like these who request it via contract. Here are some examples:

Blanket – Landlords
Gives AI status to all managers or lessors of a company’s premises when they require it by contract. Nearly every commercial lease includes general liability insurance requirements that include the provision of AI status for the landlord.

Blanket – Vendors
Gives AI status to all vendors of the insured when they require it by contract. Vendors who are part of a product’s supply chain pay particular attention to this since they want to protect themselves from product liability litigation.

Designated Organizations
This endorsement allows the policyholder to name specific entities as AI’s.

Some (not all) carriers are willing to offer a broader endorsement which provides AI status “where required by written contract.”  This version of the blanket AI endorsement provides the most flexibility for the insured.
 
Silent on Action Over
By “silent” we mean the policy makes no mention of action over lawsuits (in the form of an action over exclusion).

Let’s say an employee for a landscape company is mowing a lawn. The homeowner has a particularly ill tempered dog that is normally kept in a dog run. On this particular day the homeowner decided to let the dog inside then he left the front door open. The dog runs out of the house and bites the employee of the landscaper. Since the injury was on the job his medical bills are paid for by worker’s compensation. If the employee then sues the homeowner that is the third-party-over action. 
 
Miscellaneous Boilerplate Clauses
Knowledge of Occurrence, Claim or Suit – requires an executive or insurance professional at the insured have knowledge of the loss to trigger the notice provisions in the policy.  If a lower level employee knows that something went wrong but didn’t report it and this clause is not in the policy, the claim may be denied on the grounds that it was known about without being reported within a specified time period.  

Unintentional Errors or Omissions – states that failure to disclose all hazards that were in existence at the time you made application for this policy shall not prejudice your rights with respect to the insurance afforded by this policy, so long as your failure or omission was not intentional.  Important to avoid denial of coverage for an innocent omission or inaccuracy in the client’s insurance applications.

Primary/Non-Contributory Wording – outlines what happens when two different GL policies could potentially pay the same claim. Many third parties will ask you to make your policy “primary and non-contributory” so they know that your policy will pay first dollar on the claim and your carrier will not ask their carrier to chip in until your policy limits are completely exhausted. This is required by many contracts and almost all commercial office leases.

30-day Notice of Cancellation – provides all insureds (including AI’s) with 30 days written notice of ahead of a policy cancellation or non-renewal for any reason. The exception is cancellation for non-payment of premium which most carriers will not change from the standard 10 days. 30-day notice of cancellation is required by many contracts and almost all commercial office leases.

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11/25/2024