Key Takeaways
- The broad form property damage endorsement eliminated property exclusions in older insurance policies.
- Today, this endorsement is obsolete as current policies cover its scope by default.
- Originally, it filled gaps related to property damage exclusions in 1973 liability policies.
- The 1985 CGL policy update included broad form property damage terms automatically.
What Is a Broad Form Property Damage Endorsement?
A broad form property damage endorsement was an addition to a commercial general liability (CGL) policy that eliminated the exclusion of property as part of the coverage provided by the insurer. A higher premium was usually required for this additional coverage.
In-depth Overview of Broad Form Property Damage Endorsement
A broad form property damage endorsement refers to, among other things, liability coverage for damage from work performed by subcontractors on behalf of owners and general contractors. The necessity for a broad form property damage endorsement has become obsolete as reforms in the 1980s required it to be included under CGL coverage. Therefore, under current CGL coverage, a broad form property damage endorsement automatically applies unless otherwise excluded.
In the previous general liability insurance policy (1973 comprehensive general liability insurance policy), there were many exclusions that resulted in certain damages to property not being covered, primarily the care, custody, or control exclusion.
Because the coverage was limited to only certain areas of the property, and in certain instances, the broad form property damage endorsement was required to obtain a blanket coverage for property damage.
In 1985, the comprehensive general liability insurance policy was updated to the commercial general liability policy and included terms that were covered by the broad form property damage endorsement, rendering the broad form property damage endorsement obsolete.
Evolution and Importance of Broad Form Property Damage Endorsement
The term “broad form property damage” (BFPD) hasn’t been in use by the Insurance Services Office, Inc. (ISO) since the mid-1980s, in connection with CGL insurance policies. BFPD is often still specifically demanded today as part of a contractor’s liability coverage. These current calls for BFPD endorsements indicate a lack of understanding of what is automatically included in today’s ISO commercial general liability policies (editions 1985 and later).
In 1985, ISO explained that the following coverages were provided under the “new” commercial general liability policy. It stated that both new forms (occurrence and claims-made) contain the essential scope of coverage provided for broad form property damage under the old comprehensive general liability insurance (Ed. 1-73) and the old broad form comprehensive general liability endorsement (GL 04 04 Ed. 5-81).
Because changes to the comprehensive general liability insurance policy were far-reaching, in both coverage and approach to premium development, ISO distributed a vast number of publications to thoroughly inform the insurance industry as well as the public on the changes to CGL policies.