General Liability

1. General Liability Coverage Issues and Solutions September 17, 2014

2. Speakers Pam Ferrandino Executive Vice President National Practice Leader Casualty, Placement Willis NA pam.ferrandino@willis.com 212-915-7928 Jim Hensley Regional Practice Leader Claims Willis NA jim.hensley@willid.com 303-765-1593 Steven Sachs Executive Vice President Director of Real Estate and Hotel Practice Willis NA steve.sachs@willis.com (410) 584-8935

3. Session Objectives • Identify potential issues • Provide possible solutions • Risk management actions • Additional coverage endorsements • Coverage modifications

4. What to Take Away • Strategies for internal discussions with legal • A better understanding as to impact of ISO 2013 changes • Identification of other GL coverage issues to be addressed contractually • Confirming the UW and Claims are on the same page • Policy Workshop with internal team and your broker is good risk management

5. Indemnity Agreements • Anti- Indemnity Statutes • Limited, Intermediate, Broad • Anti-Indemnity Legislation/History • Jurisdictional Differences • Additional Insured Clause

6. Indemnity Agreements • PERMISSIBLE INDEMNITY UNDER CONSTRUCTION ANTI-INDEMNITY STATUTES Source: IRMI

7. Additional Insured Endorsements – A History • CG 2010 (11/85) • “liability arising out of” • Ongoing and Completed Operations • 1993 Removal of Completed Operations • CG 2010 (10/01) and CG 2037 (10/01) • Reinstated Completed Operations • Achieve 11/85 coverage with two forms • CG 2010 (07/04) and CG 2037 (07/04) • “Caused in Whole or in Part by”

8. 2013 Substantive Changes • Limits coverage only “to the extent permitted by law” • Additional Insured coverage will not be broader than that to which the named insured is required by contract to provide • The amount the insurer is required to pay out is limited to the lesser of the limits of insurance or the amount required by contract

9. Other Additional Insured Endorsement Changes • CG 2038 (04/13) • Owners, Lessees or Contractors • CG 2001 (04/13) • Primary and Non-Contributory • “TAKE AWAYS” • Compliance • Outcomes Consistent with Intent • Future of Anti-Indemnity

10. Vendors and Service Contracts • Indemnification • Completed operations • Limits

11. Property Damage Exclusion for Real Estate Property Managed • CG 22 70 • This insurance does not apply to "property damage" to property you operate or manage or as to which you act as agent for the collection of rents or in any other supervisory capacity. • With respect to your liability arising out of your management of property for which you are acting as real estate manager this insurance is excess over any other valid and collectible insurance available to you. • Waiver of Subrogation • Legal Liability (CP 00 40)

12. Hotel Management Agreements • Manager should be an additional named insured if owner purchases insurance

13. Financial Services Endorsement • CG 21 52 04 13 • “This insurance does not apply to "bodily injury", "property damage" or "personal and advertising injury" resulting from the rendering of or the failure to render financial services by any insured to others. For the purpose of this exclusion, financial services include but are not limited to: “ • Financial Services is “undefined”? • Solution – Don’t Accept

14. Cyber Endorsements/Language • “Internet of Things” – Malicious Refrigerator Hacking • ISO CG 21 06 05 14 • Electronic Data Liability – Give Back • Definition of Bodily Injury

15. Summary • Evolving Risks • Policy Workshops

16. Questions?