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Property & Casualty Insurance/XCU Exclusion Endorsement

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Question
If XCU Endorsement is attached on a CGL policy, then the insured will have no coverage only if performing "operations" that may involve XCU exposures as defined in the endorsement.  The endorsement states "Description of Location and Operations". So the exclusion is limited to a specificed location and to "operations" exposure (as opposed to premises, products and completed operations).

From what I read in the endorsement CG2142, I understand that coverage will apply even with the referred XCU exclusion endorsement, if the cause for BI/PD is the insured's exposure to "premises", "prodcuts" and "completed operations".

It is my opinion that by referring to "Description of Location and Operations", this XCU exclusion endorsement's intention is to preclude coverage for XCU hazards to those insured's whose main business is as contractors or subcontractors and that due to the "operations" exposure at the described locations, an XCU (as per definition) has ocurred causing third party BI/PD.

A non contractor business, as an insured under a CGL, will still retaing coverage for collapse of its building due to "premises" exposure.  This is true, since said insured does not carry out "operations" as a contractor would. Its exposure is "premises".

This last statement is my opinion on the applicability of said XCU endorsement.  This is my question to you:  Do you concur with above? Any other thoughts? Any references I could look up to?

Thanks for all your help!!

Answer
Richard, first off sorry for the delayed response. I was pondering your thoughts/theories on the endorsement and truthfully, a) it's not an endorsement I deal with on a regular basis b) you make some extremely valid points. I am very glad you didn't make this question private to me and I'm hoping you've gotten some other answers. If not, I don't feel I can give you a definitive answer/opinion but do have many underwriter friends who may be able to weigh in. So if you didn't get any other answer, please let me know and I can reach out to my network and determine where they stand. Again, however, you raise some very valid points.

Kristen

Property & Casualty Insurance

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Kristen Mulcahy, CIC

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My specialty is commercial insurance for business owners. I can answer questions regarding liability, property, auto, workers compensation, directors and officers, umbrellas and risk management for all types of businesses. Risk management, or loss control, is taking measures to reduce the chances of a loss in the first place or, helping to prevent a loss from happening again. Insurance can be complicated and confusing and there are no stupid questions! I am President of Western States Loss Control, Inc. and we provide insurance consultations to business owners and surveys/inspections for insurance companies in all states West of the Mississippi.

Experience

20+ years of industry experience.

Organizations
Past President of SCIP Southern Connecticut Insurance Professionals, a chapter of International Association of Insurance Professionals.

Education/Credentials
Certified Insurance Counselor, 2001.

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