Broad Form Property Damage Endorsement

A broad form property damage endorsement is an addition to a commercial general liability (CGL) policy. A broad form property damage endorsement eliminates the exclusion of property under the care of the insured. A higher premium was usually required for this additional coverage.

A broad form property damage endorsement refers to, among other things, liability coverage for damage to work performed by subcontractors on behalf of owners and general contractors. The availability of this coverage is disappearing, particularly with regard to residential construction. However, contractors can still purchase this type coverage under current forms of CGL coverage, as it automatically applies unless excluded.

Under the old broad form property damage endorsement form of insurance, coverage applied to the liability exposure represented by the risk of loss to property in a contractor's care, custody, or control (CCC) or on which contracted operations are being performed. Because of the scope of exclusions applicable to these two risks of loss in the 1973 comprehensive general liability (CGL) form, it became necessary to create an endorsement in order to provide the needed coverage for the BFPD hazard.

Starting in 1986 and continuing to the present, the standard CGL policy has included coverage for broad form property damage as part of the completed operations hazard. However, the insurance does not apply to property damage to the contractor's work arising out of it or any part of it and included in the “products-completed operations hazard.” This exclusion does not apply if the damaged work or the work out of which the damage arises was performed on your behalf by a subcontractor.

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. Yet, BFPD is often still specifically demanded today as part of contractors' 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 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 de- velopment, ISO distributed a vast number of publications in an effort to thoroughly inform the insurance industry as well as the public on the changes to CGL policies.