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3. CU-21-55

What the form is

The CU 21 55 Amended Terrorism Coverage – Covered Autos endorsement is designed for use with Commercial Umbrella liability policies. Its primary function is to modify the policy's terrorism coverage provisions to specifically address "covered autos". This endorsement is typically used when other terrorism-related endorsements are already part of the umbrella policy, and there's a need to clarify or reinstate terrorism coverage for the auto exposure that might have been excluded or limited by those other forms. It ensures that if the insured has elected terrorism coverage, it extends appropriately to their commercial auto liability under the umbrella, subject to the terms of the endorsement and the umbrella policy.

Classes of business it applies to

This endorsement applies to most commercial insureds who have both a Commercial Umbrella policy and underlying Commercial Auto coverage where terrorism coverage is a concern. Examples include:

• Businesses with a fleet of vehicles used for deliveries, sales calls, or transportation of goods.
• Service companies whose employees drive to client locations.
• Any commercial entity with auto liability exposure that is covered by an umbrella policy and is navigating terrorism coverage options under TRIA (Terrorism Risk Insurance Act).

For instance, a regional distribution company with a fleet of trucks and a commercial umbrella policy might use this endorsement if they've selected a terrorism coverage option that requires clarification for their auto exposure.

Special considerations

• Interaction with other terrorism endorsements: The CU 21 55 is specifically used when other ISO terrorism endorsements like CU 21 31 (Exclusion Of Other Acts Of Terrorism Committed Outside The United States; Cap On Losses From Certified Acts Of Terrorism), CU 21 33 (Exclusion Of Certified Acts Of Terrorism), CU 21 35 (Exclusion of Certified Acts of Terrorism and Exclusion of Other Acts of Terrorism Committed Outside the United States), CU 21 36, or CU 21 40 are attached to the umbrella policy.
• Non-use with CU 21 30: This endorsement should generally not be attached if endorsement CU 21 30 (which provides broader terrorism coverage options) is part of the policy.
• TRIA Compliance: Its use is often linked to the insured's choices regarding terrorism coverage as mandated or permitted under the Terrorism Risk Insurance Act (TRIA) and its subsequent reauthorizations. The decision to include or reject terrorism coverage on the underlying policies, particularly the general liability and auto policies, will influence the need for this type of endorsement on the umbrella.

For example, if an insured has an underlying auto policy with terrorism coverage and an umbrella policy with a terrorism endorsement that might ambiguously apply to autos (or exclude them), the CU 21 55 can be used to affirm that the terrorism coverage under the umbrella indeed extends to covered autos.

Key information for agents and underwriters

• Clarifying Coverage Intent: Agents should use this form to ensure that the umbrella policy accurately reflects the insured's intent regarding terrorism coverage for their commercial auto exposure, especially when multiple terrorism endorsements are in play.
• Underwriting Consistency: Underwriters must verify that the CU 21 55 is used in the correct context with compatible terrorism endorsements. It's crucial to ensure that the umbrella's terrorism coverage for autos aligns with the coverage provided (or rejected) in the underlying primary commercial auto policy.
• Risk Assessment: While this form amends coverage, the overall assessment of the terrorism risk associated with the insured's auto exposures remains critical. Factors like the area of operation, type of vehicles, and nature of business can influence this assessment.
• Avoiding Gaps or Overlaps: Proper use of this endorsement helps prevent unintended gaps in terrorism coverage for autos or conflicting terms between different terrorism endorsements on the umbrella policy.