Some time ago, I received the following question from an agent:
“We have done some searches of the VU [Big “I” Virtual University], but haven’t found what we are looking for. Have you ever done an article on the use of ISO language by companies when they do endorsements that make people think the form is ISO when, in fact, it is only using some verbiage from ISO?”
After 17 years of overseeing the “Ask an Expert” service of the IIABA Virtual University, I learned that very few agents can tell the difference between ISO and non-ISO forms. When an agent submitted a question to the service, they were told that we needed the full ISO policy form number unless it was not an ISO form, in which case we needed a copy of the proprietary form. All too often, we’d be provided a policy form number the agent thought was an ISO form, but it clear wasn’t. So, how do you tell the difference?
In the 1970’s and 1980’s a series of TV ads touted the quality of Memorex audio cassette tapes by challenging listeners to determine if what they were hearing was live or recorded. In our profession, we are often faced with determining whether a particular policy form is a pure ISO form or not. Some insurers use unaltered ISO forms, while others use modified versions or draft their own versions. The ISO vs. non-ISO issue is important because most insurance training centers on ISO forms and ISO form language has more case law interpreting it than any other single source.
In addition, you may be asked by someone for whom your insured is performing work to provide a particular ISO form “or its equivalent.” So how can you tell if a policy form is pure ISO? And what constitutes “equivalent”? Fortunately, 99% of the time, it’s not that difficult to distinguish between ISO and non-ISO forms. The following discussion includes three tests you can use, though they are not perfect, as we’ll demonstrate. In addition, we’ll include a tutorial that provides general information about ISO’s form numbering system and the importance of the “RTFP!” Doctrine.
First things first…one of the most frustrating types of coverage questions I’ve received over the years often goes something like, “Does ‘a CGL policy’ cover….” Or, “Does ‘a homeowners policy’ cover….” Or, “Does ‘auto insurance’ cover….” There is no such thing as “a CGL policy” when it comes to answering coverage or claim questions. One MUST review the specific policy form in question. Often, when someone bothers to actually read the policy, the answer to the coverage question is obvious. Thus the title of this section, “RTFP”…Read The _______ Policy! (Of course, the “F” in “RTFP” refers to “Full” ;-).
But everything starts with reading the policy. That’s why it’s absolutely necessary to know whether we’re dealing with an ISO form and, if so, what specific form, including the edition date. Otherwise, one can only respond in hypothetical generalities which are absolutely worthless in resolving coverage disputes. So, job #1 is Read The Policy.
ISO’s Form Numbering System
In his excellent article, “Policy Form Edition Dates and Why They Are Important,”(you need a login to access this article) the late, great John Eubank, CPCU, ARM says that ISO provides thousands of filed advisory policy forms for 23 lines of insurance. According to John, the Commercial General Liability (CGL) line alone has 2,115 policy forms and endorsements (as of January 8, 2014 when he published the article).
For the vast majority of coverage forms, ISO uses a 10-digit numbering format. For example:
CG 00 01 04 13
The first two digits indicate the line of insurance. For example, “CG” means it is a CGL form. “CP” would be a commercial property form, “HO” would be a homeowners form, and so forth.
The two numbers that follow the first two digits indicate the type of form. For example. “00” usually means a primary coverage form such as a CG 00 01 xx xx, HO 00 03 xx xx, etc. As an example, here are the major types of commercial property and CGL forms as listed in John Eubank’s article:
CP 00 – primary coverage forms
CP 01 – state-specific amendatory endorsements
CP 02 – state-specific cancellation and suspension endorsements
CP 03 – deductible endorsements
CP 04 – additional coverage endorsements
CP 10 – causes of loss forms
CP 11 – builders risk endorsements
CP 12 – general endorsements
CP 13 – value reporting form and related endorsements
CP 14 – additional property / property not covered endorsements
CP 15 – time element endorsements
CP 16 – applications, worksheets, and rating information forms
CP 17 – condominium endorsements
CP 19 – supplemental schedules
CP 60 – leasehold interest factor tables
CP 99 – miscellaneous endorsements
CG 00 – primary coverage forms
CG 01 – state amendatory endorsements
CG 02 – termination and suspension endorsements
CG 03 – deductibles
CG 20 – additional insured endorsements
CG 21 – exclusion endorsements
CG 22 – special provisions for certain types of risks endorsements
CG 24 – additional coverage endorsements
CG 25 – amendment of limits endorsements
CG 27 – CGL claims-made only endorsements
CG 28 – miscellaneous coverage forms and endorsements
CG 29 – miscellaneous coverage forms and endorsements
CG 99 – miscellaneous endorsements
So, what do these numbers tell us? For one thing, they provide a very broad basis for what the form does. For example, a CG 24 xx xx xx endorsement (an ‘additional coverage’ form) is probably “good” for the named insured while a CG 21 xx xx xx endorsement (an exclusionary form) likely is not good.
More importantly, this is the first test for whether a particular form is pure ISO or not. For example, I had a question about a “CG 70 35 01 12” endorsement that the agent thought was an ISO form. Knowing that ISO does not have a “CG 70 xx xx xx” series of forms tells us immediately that this is not an ISO form, so we had to request a copy in order to answer the coverage question. The agent was also confused because the copyright notice at the bottom of the form mentioned “Insurance Services Office”…more on this later. Keep in mind that as a caveat, while rare, ISO can introduce a new line of types of forms, so this test is not foolproof.
The next two numbers are the actual form number. In the example above, a “CG 00 01 xx xx” would be the CGL occurrence form. The “CG 00 02 xx xx” would be the claims-made version of the CGL policy.
The last four numbers are the edition date of the form. This is not necessarily the effective date of the form since that can vary from state to state, but rather it is the publication date. The effective date is often the same but can be a year or more later than the edition date in the form. The edition date is important for many reasons, which brings us to the next test…
ISO Countrywide Form Edition Dates
The second test for whether a form is ISO or not is the edition date. As of the publication/update date at the end of this article, here are the edition dates found on most policy forms in the marketplace from ISO’s major lines of insurance:
Commercial General Liability: 1955, 1966, 1973, 1985, 1988, 1993, 1996, 1998, 2001, 2004, 2007, and 2013 (1955 and 1966 pre-ISO).
Commercial Property: 1985, 1988, 1990, 1991, 1995, 2000, 2002, and 2007 (not effective until 11/08 but printing date on form is 06/07), and 2012.
Commercial Auto/Garage/Truckers: 1987, 1990, 1992, 1993, 1997, 2001, 2006, 2010, and 2013.
BOP: 1987, 1989, 1992, 1996, 1997, 1999, 2000, 2002, 2006, 2010, and 2013 (1989-1999 were property form only revisions.
B&M: 1986, 1991, 1995, 2001, 2007, 2008, 2011, 2013. (The 2001 edition was renamed Equipment Breakdown Protection Coverage Form and continues today.)
Crime: 1985, 1990, 2000, 2002, 2006, 2013, and 2015.
Homeowners: 1984, 1991, 2000, and 2011.
PAP: 1986, 1989, 1994, 1998, 2005, and 2018.
Why is the edition date important? One question I had was, “I have a 2008 ISO HO-3 policy….” Immediately I knew that this was likely not an ISO policy because ISO had no countrywide general revision to its HO program between 2000 and 2011. Once again, the agent was “tricked” by a copyright statement at the bottom of the form that mentioned “ISO Properties.” A caveat about this test…sometimes ISO will make a policy form (revised or new form) change in a particular state due, for example, to legislation, so it’s possible that a form is a state-specific ISO form with an edition date other than one listed above. So, this test is certainly not foolproof.
But perhaps the #1 reason why the edition date is so important is that coverages can change dramatically from one edition of the same form to the next. For example, if I borrow a neighbor’s lawn mower and injure someone, does my “ISO HO-3” policy cover me? If he’s sued, does HIS “ISO HO-3” policy cover him? In the case of an “ISO HO-3” policy, where the loss occurs is material when you consider that the coverage for this very common exposure is significantly different in the 1991, 2000, and 2011 editions of the ISO HO forms, as I wrote in this blog article. This illustrates why the question, “Does ‘a homeowners policy’ cover…” is pointless. We must know whether it’s an ISO form or not and, even if it is, we have to know the edition date to make a coverage determination for many types of claims. RTFP!
ISO Copyright Notice
Finally, the third (and most foolproof) test for whether a policy form is ISO or not involves the copyright notice usually found at the bottom of each page of the form. If there is no copyright notice anywhere in the policy form that mentions ISO, then it is either a proprietary insurer form, the insurer forgot the copyright notice, or the insurer is possibly using all or part of an ISO form in violation of federal copyright law. This doesn’t happen often, but it does happen.
If there is a copyright notice that does mention ISO, it will usually take one of two forms:
“© Insurance Services Office, Inc., 20__” or “© ISO Properties, Inc., 20__”
“Includes Copyrighted material of Insurance Services Office, Inc. with its permission”
If the policy form copyright notice says, “Includes Copyrighted material of Insurance Services Office, Inc. with its permission,” then we KNOW that it is almost certainly NOT an ISO form because of the “Includes” language. The very mention of ISO in this copyright notice often fools the reader into thinking it’s an ISO form but it actually means that some language from an ISO form is used in the insurer’s version.
If the policy form copyright notice says, “© Insurance Services Office, Inc., 20__” or “© ISO Properties, Inc., 20__,” then there is a very high chance that the form is pure ISO. But, we have come across instances where this isn’t the case. For example, a construction contract required that the owner and general contractor be named as additional insureds on the ISO CG 20 10 11 85 endorsement. Fortunately (or so it seemed), the insurer had this form available. At the bottom of the insurer-provided CG 20 10 11 85 endorsement, it clearly stated, “Copyright, Insurance Services Office, Inc., 1984.”
However, when we examined the form, the carrier had taken the ISO form and added additional language such as a requirement for a written contract, waiver of subrogation, primary/noncontributory wording, and coverage only for vicarious liability. The agent, innocently thinking this was a pure ISO form (right form number, right copyright notice) had placed a statement on the ACORD 25 certificate of insurance that the “ISO CG 20 10 11 85 is provided as required by contract.” This was not a true statement and, under some state COI laws, this might have been considered an illegal misrepresentation or even fraud.
Similarly, another construction contract required the insured’s agent to extend additional insured status under CG 20 10 07 04 and CG 20 37 07 04 endorsements “or their equivalent.” The question is, what would be equivalent to these 2004 editions of the CG 20 10 and CG 20 37? Here is a listing of the most commonly used AI endorsements and their edition dates:
- CG 20 10 – ongoing operations…editions: 1985, 1993, 1997, 2001, 2004, 2013
- CG 20 37 – completed operations…editions: 1993, 1997, 2001, 2004, 2013
- CG 20 33 – blanket ongoing operations… editions: 1997, 1998, 2001, 2004, 2013
- CG 20 38 – blanket ongoing operations (without contractual privity)…editions: 2013
My opinion is that the only forms “equivalent to” the 2004 editions of the CG 20 10 and CG 20 27 are…the actual 2004 editions of the CG 20 10 and CG 20 37. In this particular example, the carrier had an endorsement that appeared to meet the requirements of the construction contract. In fact, the language in the second paragraph of the insurer’s endorsement said explicitly that, “Additional Insured provisions provided in this endorsement contain equivalent language to Insurance Services Office Endorsements CG 20 10 07 04 and CG 20 37 07 04.” This was perfectly true…the endorsement did “contain” the same language in these ISO forms, BUT it also added a lot of other provision NOT in the ISO forms such as a written contract requirement, professional liability exclusion, restriction of recovery to the lesser of policy or contract limit, primary and noncontributory language, waiver of subrogation, etc. Again, the agent had made a statement on the ACORD 25 certificate that coverage “equivalent to” the ISO forms was provided. Not true.
In a more recent example, just last week an insurance consultant contacted me about a renters policy his son bought from a new startup company called Lemonade (recommended, of all things, by an insurance agent!). The renters policy did not use the ISO form number format, but he noticed that the copyright at the bottom of the pages in the form indicated that this was a pure 2011 ISO HO-4 form. Further inspection revealed language not found in the ISO form filed and approved in that state. It appears that the copyright notice is incorrect on this proprietary form, something which could led an informed person to believe that there was coverage for something (in this case, canine liability) that was actually excluded. Whether this is a violation of ISO form licensing requirements is a matter for ISO to consider.
So, to summarize, here are three basic tests to determine if a policy form is probably NOT an ISO form:
- The form number structure does not follow ISO’s 10-digit format.
- The edition date of the form does not track with ISO’s filed countrywide edition dates.
- There is no ISO copyright mention or the copyright notice says, “Includes Copyrighted material of Insurance Services Office, Inc. with its permission.”
And, again, consider that there are exceptions to these rules, so caveat emptor. Hopefully, you found this background information helpful and, always remember, “RTFP!”
Includes material copyrighted by the Independent Insurance Agents & Brokers of America, 2014-2015.
Used with permission.
Photo by lejoe
Want to learn more about this topic? It’s in my book “When Words Collide: Resolving Insurance Coverage and Claims Disputes” available at Amazon.com.