Contractual Liability Limitation
RESTRICTS CGL contractual-liability coverage — a red flag, not a benefit. Watch for it.
What it actually does
CG 21 39 *restricts* the contractual liability coverage built into the standard CGL. Standard CGL Coverage A (bodily injury and property damage) includes contractual liability for "insured contracts" — most importantly, the indemnity obligations in your subcontracts. CG 21 39 narrows the definition of "insured contract," stripping out the tort-assumption portion that makes most construction indemnity agreements insurable.
This is a coverage RESTRICTION, not an enhancement. If a sub presents a COI with CG 21 39 attached, their CGL may not respond to the contractual indemnity claims you've shifted to them via subcontract. The indemnification clause in your subcontract can be effectively un-insured.
GCs should generally treat CG 21 39 as a serious flag and escalate. If you accept it, you may be accepting that the indemnity protection in your subcontract is paper-only.
Verification checklist
- 01ALWAYS check the endorsement list for CG 21 39. If present, escalate.
- 02Compare the sub's subcontract indemnity clause to what the policy actually covers post-CG 21 39.
- 03Ask the sub's broker for confirmation of full contractual liability coverage in writing.
- 04If the sub can't remove CG 21 39, consider the subcontract's indemnity clause unenforceable in practice.
Common mistakes
- ·Missing CG 21 39 on the endorsement list — many compliance reviewers focus on AI and waiver forms and skip restrictions.
- ·Accepting the sub's broker's verbal assurance that 'contractual is covered' without reviewing the actual endorsements.
- ·Assuming standard CGL contractual liability is always present (it's not, when CG 21 39 is attached).
Frequently asked questions
Is CG 21 39 a good thing to see on a COI?
No — it's a restriction. CG 21 39 limits the contractual-liability coverage in the CGL, which can leave the indemnity obligations in your subcontract uninsured. Treat it as a flag to escalate.
What should I do if a sub's COI shows CG 21 39?
Ask the broker to confirm in writing how contractual liability is covered, compare it to your subcontract's indemnity clause, and consider requiring the sub to remove it before they start work.
Does CG 21 39 affect additional-insured coverage?
Not directly — it targets contractual (indemnity) coverage, not AI status. But the two often work together, so a CG 21 39 restriction can undercut the protection you thought the indemnity clause provided.
Checking a COI for CG 21 39?
Upload it free — we'll tell you whether CG 21 39 is actually attached, the right edition, and scheduled correctly, plus every other gap against your requirements.
Check a COI for CG 21 39 →Related endorsements
This page explains CG 21 39 in plain English for COI verification. It is informational only and is not legal or insurance advice — confirm the actual endorsement language and have your counsel or insurance agent review your specific requirements.