1. Forms
2. CG
3. CG-21-91

What the Form Is

The CG 21 91 endorsement is an exclusion form used in commercial insurance policies. Its primary purpose is to eliminate coverage for losses or damages resulting from acts of terrorism that specifically involve the use of nuclear, biological, or chemical agents (NBC terrorism). This means that if a terrorist event occurs using such materials, any resulting 'bodily injury', 'property damage', personal and advertising injury, or other covered losses under the policy would not be paid by the insurer if this endorsement is attached.

Classes of Business It Applies To

This endorsement can be attached to a variety of commercial liability coverage parts, making it relevant to a broad spectrum of industries. These include, but are not limited to:

• Commercial General Liability Coverage Part
• Liquor Liability Coverage Part
• Owners and Contractors Protective Liability Coverage Part
• Pollution Liability Coverage Part
• Products/Completed Operations Liability Coverage Part
• Railroad Protective Liability Coverage Part

Real-world examples where this endorsement might be particularly relevant include businesses located in high-profile urban areas, government buildings, entities involved with critical infrastructure, chemical manufacturing or storage facilities, pharmaceutical companies, research laboratories, and agricultural businesses that might be targets or have heightened exposure to NBC agents.

Special Considerations

The CG 21 91 is one of several endorsements developed by ISO in response to the Terrorism Risk Insurance Act (TRIA) and its subsequent reauthorizations. Key considerations include:

• Specificity of Exclusion: Unlike broader terrorism exclusions (e.g., CG 21 90, which excludes most acts of terrorism subject to certain conditions), CG 21 91 specifically targets terrorism involving nuclear, biological, or chemical agents. An act of terrorism that does not involve these specific means might still be covered or addressed by other policy terms or endorsements.
• Interaction with TRIA: The application and necessity of terrorism-related endorsements can be influenced by the status and provisions of TRIA. Insurers are typically required to offer terrorism coverage as defined by TRIA, which insureds can then accept or reject. This endorsement carves out specific types of terrorism from any accepted coverage.
• Potential for Uninsured Exposure: If this endorsement is attached, the insured will have no coverage under the policy for losses stemming from NBC terrorism. Businesses with a perceived higher risk of such events need to be acutely aware of this gap.

Key Information for Agents and Underwriters

For Agents:

• It is crucial to clearly explain the limited scope of this exclusion to the insured. They must understand that it only applies to terrorism involving nuclear, biological, or chemical agents and how it interacts with other terrorism endorsements or general policy provisions.
• Discuss the potential for catastrophic uninsured losses if an NBC terrorist event occurs.
• Ensure the client understands if they have rejected broader terrorism coverage and how this endorsement further refines what is excluded.

For Underwriters:

• Assess the specific NBC terrorism exposure of the risk. While this form excludes the peril, understanding the underlying exposure can inform overall risk assessment and the appropriateness of other coverages or pricing.
• This endorsement is often used when an insurer is unwilling to provide coverage for the catastrophic and unpredictable nature of NBC terrorism events.
• Verify that its use is consistent with the insurer's underwriting guidelines for terrorism risk and with any applicable state or federal regulations regarding terrorism coverage offerings.
• When used in conjunction with policies that provide some measure of terrorism coverage (as mandated by TRIA, unless rejected), this endorsement clarifies that NBC-related terrorist acts are not part of that coverage.