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 strips this out, leaving only narrow categories of contractual liability covered.
This is a coverage RESTRICTION, not an enhancement. If a sub presents a COI with CG 21 39 attached, their CGL will not respond to most contractual indemnity claims you've shifted to them via subcontract. The indemnification clause in your subcontract is effectively un-insured.
GCs should generally REJECT subs whose CGL has CG 21 39. If you accept it, you're 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).
Verify CG 21 39 on every sub's COI automatically
Paste your vendor list, upload their COIs, get back a per-vendor gap report — including whether they have CG 21 39 attached. Free, no signup until you want monitoring.
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