What it means
CG 21 39, Contractual Liability Limitation, replaces the policy’s definition of insured contract with a shorter version. It removes the part that covers tort liability you assume for another party under a general business contract.
What remains typically includes leases of premises, sidetrack agreements, easement or license agreements, obligations to indemnify a municipality required by ordinance, and elevator maintenance agreements, subject to the form wording.
For contractors and vendors who sign indemnity clauses, this endorsement can leave those promises uninsured. It is worth spotting before a policy is bound, because many contracts require contractual liability coverage.
An example
Harborview Security Services signs a guard contract promising to indemnify a shopping center for claims arising from its guards’ work. Its general liability policy carries CG 21 39, so a later claim under that indemnity would likely fall outside coverage.
Names in this example are fictional.
See this term in your own contract.
Send a lease, subcontract or client agreement with the policies you hold. You get every insurance requirement in it, cited to the clause, set against what your policies say. Free, and back within one business day.
Get a free contract checkCG 21 39 contractual liability limitation, answered
Why would an insurer add CG 21 39?
Insurers use it to limit exposure for certain higher risk classes, or when the business is not expected to sign indemnity agreements. It can reduce the insurer’s risk significantly. For a contractor or vendor that routinely accepts indemnity clauses, though, it may leave important contract obligations without insurance support.
Can CG 21 39 be removed?
Sometimes. The insurer may agree to remove it at renewal or mid term, possibly for additional premium, or another insurer may offer a policy without it. Whether that is possible depends on the class of business and underwriting appetite. Raise it early if your contracts require contractual liability coverage.
General information only. It is not legal or insurance advice. Only issued policy documents and endorsements describe actual coverage.