The wording now excludes: losses that any insured or employee knew hadoccurred, in whole or in part, prior to the policy period; and losses that began prior to the insurer going on risk and continued into subsequent policy periods. Why was it necessary to make this change? Is the policy now a “claims-made” form?

Recent court decisions in Canada and the U.S. have broadly interpreted the coverage. By expanding the time period covered, a “triple” or “continuous” coverage trigger may be applied instead of a “manifestation” trigger. This generally affects CGL coverage for construction defect and environmental losses.
Prior to the mid-nineties, the manifestation trigger usually applied. Only the insurer(s) on risk at the time damage was first manifest were responsible for indemnifying the loss, even though damage may have continued in subsequent policy periods covered by other insurers.
In the U.S. Montrose decision, however, a California court ruled that insurers who go on risk subsequent to manifestation have to respond to known losses even if another insurer has already been put on notice. If there is uncertainty about damage or injury during the policy period and liability hasn’t been determined, subsequent insurers have a defence obligation.
Following this 1995 decision, other U.S. rulings extended this further to include the obligation to indemnify.
A similar Canadian case, Alie v. Bertrand & Frere Construction Co., involved homeowners who suffered damage when the concrete foundations of their homes began to deteriorate.
The Ontario Court of Appeal upheld the judgment, which required all 30 insurers, who had provided some coverage between the start of the deterioration and the final resolution of the claim, to respond to the loss and share defence costs even though, in some cases, damage was sustained before the policy period began. This meant that injury or damage known to the insured prior to the beginning of the policy period could be found to be covered under the CGL policy if the insured’s legal liability was not yet established when the policy went into effect. This broader interpretation was not intended by insurers, so a change had to be made.
Adding the new provisions to the CGL does not make it a “claims made” form. It simply clarifies insuring intent. Once a loss becomes known to the insured, subsequent policies issued will not be triggered. In the case of injury or damage that manifests and continues over a period of time, policies that are triggered include those in effect from the time the damage begins until the loss becomes known to the insured, i.e., a third party brings an issue to the insured’s attention, or has put the insured on notice.