VIRTUAL UNIVERSITY
“DAGGER” OR PLUS SYMBOL CLASSES: WHAT THEY MEAN Nearly 40 percent of Insurance Services Office’s (ISO’s) general liability class codes are, what some call, “dagger” codes. Currently, 474 of ISO’s general liability class codes are “dagger” classes; however, ISO regularly reviews these codes for continued inclusion.
definition for a loss that might be considered a products/ completed operations loss. In short, there is little relevant products/completed operations exposure. When there is such a negligible exposure, there is no need to define or provide a “rate” for the “exposure.”
A “dagger class” or “plus sign class” indicates that Products and/or Completed Operations coverage is included as part of and not separate from the Premises/Operations coverage. For lack of a better way to explain it, when an operation is classed as a “dagger” or “plus sign” class, bodily injury (BI) and property damage (PD) claims resulting from the insured’s legal liability are not segregated based on when or where they occur. All BI and PD claims are, in a sense, equal.
Contradictory Confusion
Additionally, there is no separate products/completed operations aggregate limit when an operation falls within a “dagger” classification. All liability losses are subject to the general aggregate limit. Lastly, products or completed operations coverage is provided at no additional premium when the operation is a “dagger” class. In “standard” or “non-dagger” class codes, a separate loss cost (rate) applies to both premises/operations and products/ completed operations coverage; but “dagger” class codes have only one loss cost (rate) which is based almost exclusively on the premises/operations exposure. If there is a perceived products and/or completed operations exposure, the “rate” is included in the premises/operations “rate.”
“Dagger” classes create confusion because of the seeming contradiction between policy wording and coverage rules. On first reading, the unendorsed commercial general liability (CGL) policy appears to specifically exclude products and/or completed operations losses for “dagger” classes. “V.16.b.(3)” reads: 16. “Products-completed operations hazard”: b. Does not include “bodily injury” or “property damage” arising out of: (3) Products or operations for which the classification, listed in the Declarations or in a policy Schedule, states that productscompleted operations are subject to the General Aggregate Limit. However, Rule 25.F.1. reads: F. Symbols
Why Dagger Classes Exist
1. Plus Sign
Understanding the “what” or effect of a “dagger” class is simpler when the “why” is known. The “why” is quite simple – actuaries and loss exposures.
A plus sign when shown in the Premium Base column under General Liability insurance in the Classification Table – means that coverage for Products and/or Completed Operations is included in the Premises/Operations coverage at no additional premium charge. When this situation applies, the classification described in the policy schedule or Declarations must state that:
Statistically, operations assigned a “dagger” class have a negligible or even nonexistent products/completed operations loss exposure. Following are a few of the “dagger” classes that demonstrate the lack of a products/completed operations exposure: • Airports • Apartment buildings • Archery ranges • Beaches • Churches • Day care centers • Fairs • Fishing piers • Golf courses • Insurance agents • Schools • Warehouse Consider each of these examples. While a products/completed operations loss may be possible, imagining one is very difficult. A products and/or completed operations loss is statistically improbable. Nearly every imaginable loss involves the premises or the on-going operations. Because a products/completed operations loss is statistically unlikely, there is no separate loss cost (rate) and no separate
“Products-completed operations are subject to the General Aggregate Limit” to provide Products and/or Completed Operations coverage(s). While the policy seems to exclude products/completed operations coverage in “dagger” classed operations, the rule states that coverage for products and/or completed operations is included in the premises/operations coverage. What could be more contradictory than this? Further, since neither the insured nor the claims adjuster get a copy of the rule, it seems the most likely scenario is the denial of any loss that may be considered a product or completed operations loss. However, a clear reading and interpretation of the policy language supports the rule rather than contradicts it. The supposed “exclusionary” wording serves only to remove any product or operation loss subject to a “dagger” class code from the definition of “Products-Completed Operations Hazard.” Removing the ability to classify any loss as a products/ completed operations loss allows all losses to be classified Continue on page 22 wisconsin INDEPENDENT AGENT
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