Q: A carrier is adding the 1998 version of the ISO form CG 21 44 Limitation to Designated Premises endorsement to all policies on habitational or rental properties with more than one location. What is the form used for and why use such an old form?  

Response 1: Are you sure it's the form from 1998? Edition dates can and do affect the coverage provided. ISO introduced a mandatory, amendatory endorsement in 2014 that replaced prior editions. The newer edition constricts current coverage over prior editions.

If it really is the 1998 version, then the endorsement is generally used when separate policies are issued to multiple location risks. For example, if there are 11 locations of habitational or rental properties with 11 different policies, the insurer does not want the possibility of the court interpreting that each of the 11 policies provides insurance protection for all 11 locations—thereby “stacking limits." However, if all 11 locations are listed on the same policy, this endorsement would not be needed. 

Response 2: This endorsement has nothing to do with the limits. The CGL policy typically has a limit for each occurrence and a general aggregate limit. In some instances, the insurer may endorse the policy to provide a per-location general aggregate limit. Amending the general aggregate limit to a per-location limit is entirely unrelated to the Limitation to Designated Premises endorsement.

If an insurer is telling you the Limitation to Designated Premises endorsement is intended to prevent stacking of limits, it is completely wrong.

Response 3: I'm at a total loss regarding this thought process. General liability per occurrence coverage is limit based, not location based. Even the per location aggregate applies to only the aggregate limit, as it says.

Nothing in this very old version of the endorsement—the most current is the 2017 edition—addresses limits of coverage found in a separate section of the policy form. The limits of coverage are addressed in the general liability form itself. The CGL form states in Section III that the limit of insurance shown in the declarations is the most it will pay. There is nothing that allows stacking and nothing in the Limitation to Designated Premises endorsement that prevents stacking.

Response 4: The endorsement is designed to limit liability coverage to the designated premises only. The phrase “operations necessary or incidental to those premises" could be interpreted to provide some off-premises coverage. In 2017, ISO changed the endorsement to cover only injury or damage that occurs on scheduled premises or appurtenant grounds and structures. This wording removes any off-premises liability coverage. Prior to 1986, this was called Owners, Landlords or Tenants (OL&T) coverage. 

Response 5: I've seen this endorsement used when a named insured needs a specialty policy for a separate site that won't fit in their regular program. Otherwise, find another carrier. You don't need a company restricting policies beyond the norm.

This question was originally submitted by an agent through the Big “I" Virtual University's (VU) Ask an Expert service, with responses curated from multiple VU faculty members. Answers to other coverage questions are available on the VU website. If you need help accessing the website, request login information.

This article is intended for general informational purposes only, and any opinions expressed are solely those of the author(s). The article is provided “as is" with no warranties or representations of any kind, and any liability is disclaimed that is in any way connected to reliance on or use of the information contained therein. The article is not intended to constitute and should not be considered legal or other professional advice, nor shall it serve as a substitute for obtaining such advice. If specific expert advice is required or desired, the services of an appropriate, competent professional, such as an attorney or accountant, should be sought.