The Insurance Services Office (ISO) has presented four major filings in commercial property, business auto, business owner’s coverage, and commercial general liability (CGL), some of which will make 2013 an interesting year for professionals whose success hinges on understanding insurance law. These are the first major new filings by the ISO in seven years.
Coverage Form Changes
The new filings entail 11 coverage form changes that begin to take effect in 2013, including the following five.
Revision to the Liquor Liability Exclusion
“Bring Your Own” (BYO) operations have never been specifically addressed within the context of the exclusion’s requirement that the insured be in the business of manufacturing, selling, serving, or furnishing alcoholic beverages for the exclusion to apply. The rise in popularity of restaurants that allow patrons to bring their own wine has necessitated this revision—proprietors are questioning whether their existing insurance policies cover them adequately for this type of service, given that such policies generally exclude liquor liability coverage.
New policy language will specify that BYOs are not in the business of selling alcoholic beverages. This appears to clarify the original intent that was left hanging by earlier forms. The ISO is also revising the liquor liability exclusion to specifically state that the exclusion applies even when a claim alleges negligence or any other wrongdoing in:
supervision, hiring, training, or mentoring of employees or any other party; and/or
providing or failing to provide transportation when any person is or is suspected of being under the influence of alcohol.
This additional wording tightens up coverage to comply with the apparent original intent.
Electronic Data Exclusion (Exclusion “p.” in the CGL)
The ISO is broadening coverage by introducing an exception to the electronic data exclusion if bodily injury occurs.
Material Published with Knowledge of Falsity Exclusion & Material Published Prior to Policy Period Exclusion (Exclusions “b.” and “c.” in Coverage B of the CGL)
Both exclusions have been endorsed to add the phrase “in any manner” to address Internet and electronic publication of material. This change does not alter coverage according to the ISO.
Auto and Mobile Equipment Definitions
Changes to these two definitions in the various liability forms are editorial only. Reference to “in the state” is deleted to recognize that the form is available in jurisdictions that are not states (DC, Puerto Rico,Guam, and US Virgin Islands).
Electronic Data Liability Coverage Form B CG 00 65
The ISO has removed the last sentence of Exclusion g., Infringement of Intellectual Property Rights, stating that the wording is not applicable to the coverage provided by the Electronic Data Liability Coverage Form.
There will be more changes than those covered by this note. It is incumbent on all insurance professionals to be familiar with the policy wording in effect at the time of the loss and to consider whether the new wording automatically affects the older policies. The new forms will not be adopted by all insurers and some will add or delete parts to work with their customer base. Whenever a question of coverage arises, a key aspect of understanding insurance law is to obtain the actual policy wording delivered to the insured.
STP has recently issued an update to Insurance Claims: A Comprehensive Guide and also publishes the following insurance guides: