Which endorsement is designed to tailor CGL coverage to a specific contract exposure?

• A. waiver of subrogation
• B. completed operations hazard
• C. insured contracts
• D. additional insured

Answer: (C)

In the CGL, some endorsements are used to tailor coverage to the specific risks created by a contract. The insured contracts endorsement is designed for that purpose: it covers the insured’s contractual liability—that is, the liability the insured assumes under a contract with a client or other party. When a contract requires the insured to be responsible for damages or injuries arising from the work, this endorsement explicitly extends the policy to cover those contractual obligations, ensuring the insurer will respond to claims tied to the contract terms.

Why this fits best: contracts often shift or expand liability beyond ordinary negligence, and standard CGL coverage may not fully capture those contractual liabilities. The insured contracts endorsement directly addresses that exposure by recognizing and covering the insured’s duties under the contract itself, rather than relying on generic liability coverage alone.

For contrast, a waiver of subrogation prevents the insurer from pursuing recovery from the other party after a loss, which affects subrogation rights but not the underlying coverage for contractual liability. Completed operations hazard focuses on liability arising after work is finished, a post-project exposure rather than the contract-specific liability. An additional insured designation extends coverage to another party on the policy, but it changes who is covered rather than tailoring the insured’s contractual exposure.