Section 2259 - Grounds and Manner for the Use of Limiting and Restricting Endorsements(a) An insurer may use a limiting and restricting endorsement only upon one or more of the following grounds: (1) To limit insurance coverage for liability for compensation to employees of the specific entity named as the insured in the policy.(2) To exclude an individual who is related to the insured by blood, marriage, adoption or domestic partnership and who is not an employee.(3) Where the insured seeks by endorsement to negate an "election" under Labor Code Section 4151 to bring under the compensation provisions of the Labor Code persons in his employment who are excluded from the definition of "employee" by Section 3352 and other provisions of Article 2 of Chapter 2 of Part 1 of Division 4 of the Labor Code.(4) To provide notice to the employer that liability is uninsurable for any of the following: Additional compensation payable to his or her employee due to the employer's serious and willful misconduct pursuant to Insurance Code Section 11661; the illegal employment of a minor under 16 years of age pursuant to Insurance Code Section 11661.5; or the employer's reimbursement to the insurer for the amount of increase in indemnity payments as provided by Labor Code Section 4650(e) pursuant to Insurance Code Section 11661.6.(5) To exclude only such liability of the employer if the employer affirms in writing to the insurer that other coverage is secured or the entity is lawfully uninsured (e.g., liability of the State and its political subdivisions and institutions).(6) To exclude an employee who is covered for workers' compensation benefits on a policy also affording comprehensive personal liability insurance.(7) To exclude liability of an employer for employees who are covered under another employer's workers' compensation policy pursuant to an agreement made under Labor Code Section 3602(d).(8) To exclude liability when the employer's business is conducted in such a manner that it is impossible or impracticable to determine the nature, scope, and extent of employment covered by the insurer without the use of a limiting and restricting endorsement.(9) To prevent the performance of work in such an extremely hazardous manner or under such hazardous conditions as would reflect a reckless disregard by the employer for the welfare of its employees.(10) To prevent the issuance of an unrestricted policy if it would serve to encourage an operation that is contrary to law or to the rules of a regulatory agency.(b) An insurer shall use the customized limiting and restricting endorsement form set forth in Section 2267 only if the limitation and restriction is based upon one or more of the grounds enumerated in subsections (8) through (10) of subdivision (a) of this regulation. An insurer shall submit and obtain approval to use a customized limiting and restricting endorsement in accordance with Sections 2266 and 2267 before attaching it to a policy.Cal. Code Regs. Tit. 10, § 2259
1. New section filed 9-18-67; designated effective with respect to all policies and endorsements with an effective date failing on or after April 1, 1968 (Register 67, No. 38).
2. New subsection (g) filed 11-12-76; designated effective with respect to all new policies with an inception date falling on or after January 1, 1977, and with respect to renewal policies as of the first normal anniversary date falling on or after January 1, 1977 (Register 76, No. 46).
3. Amendment of subsection (g) filed 1-23-78 as an emergency; effective upon filing. Certificate of Compliance included (Register 78, No. 4).
4. Repealer of former subsection (b) and sequential redesignation of subsequent sub-sections filed 12-1-78 as an emergency; designated effective 1-1-79. Certificate of Compliance included (Register 78, No. 48).
5. Amendment of section heading, section and NOTE filed 2-2-2016; operative 4-1-2016 (Register 2016, No. 6). Note: Authority cited: Section 12921(a), Insurance Code. Reference: Sections 11650, 11651, 11652, 11653, 11654, 11655, 11656, 11656.7, 11656.8, 11656.9, 11657, 11658, 11658.5, 11659, 11660, 11661, 11661.5, 11661.6, 11662 and 11663, Insurance Code.
1. New section filed 9-18-67; designated effective with respect to all policies and endorsements with an effective date failing on or after April 1, 1968 (Register 67, No. 38).
2. New subsection (g) filed 11-12-76; designated effective with respect to all new policies with an inception date falling on or after January 1, 1977, and with respect to renewal policies as of the first normal anniversary date falling on or after January 1, 1977 (Register 76, No. 46).
3. Amendment of subsection (g) filed 1-23-78 as an emergency; effective upon filing. Certificate of Compliance included (Register 78, No. 4).
4. Repealer of former subsection (b) and sequential redesignation of subsequent sub-sections filed 12-1-78 as an emergency; designated effective 1-1-79. Certificate of Compliance included (Register 78, No. 48).
5. Amendment of section heading, section and Note filed 2-2-2016; operative 4/1/2016 (Register 2016, No. 6).