ISO has issued new Commercial General Liability (CGL) forms and endorsements that are operative as of April 2013. Many of these new policy provisions will affect our readers. Some take away coverage, others add more, and a few new ISO provisions set forth clarification of the meaning of existing forms.
I will periodically discuss in the Guide how these new provisions change coverage in future policies. Many states have already adopted these changes, including Iowa, Nebraska, South Dakota, North Dakota, Missouri and Kansas. Future policies issued after April may use these new forms. An understanding as to what is covered would seem essential for our readers.
Why does ISO make such changes? The marketplace, needs of policyholders, case law, and experts in the field all contribute to whether or not a change is warranted. I almost always discuss case law and legal holdings in my posts. This is because courts, who are charged with interpreting common ISO policy provisions, may inadvertently distort the meaning of the underwriter’s words or the intentions of the policyholder. The policyholder may have expected coverage at the time he paid the premium, but the court later denied it based upon policy language that the insured did not understand. Not all court decisions in various states are uniform either. So as the courts – in essence – rewrite policies through their rulings, ISO seeks to create continuity and clarity by reviewing its forms from time to time to determine whether the common language is operating as all the parties to the insurance contract really intended. This is a good thing for the entire marketplace – policyholders, insurance companies, brokers, agents and insurance coverage lawyers like me.