Per-Project and Per-Location Aggregate Endorsements on Construction Contracts

The ISO endorsement Designated Construction Project(s) General Aggregate Limit (CG 25 03, 05 09 edition) does four things that matter in practice. First, for damages and medical payments that can be attributed only to ongoing operations at a single designated project, it creates a separate aggregate for that project equal to the general aggregate shown in the declarations. Second, payments on that project reduce only that project's aggregate, not the policy general aggregate or any other project's aggregate. Third, the each occurrence limit still applies, now subject to the project's aggregate.

Fourth, and most overlooked, a payment that cannot be attributed only to ongoing operations at one designated project is charged to the policy general aggregate or the products-completed operations aggregate. A claim from the contractor's equipment yard, its office or a job that is not scheduled falls there. The form also says a project that is abandoned or delayed, or abandoned and later restarted, or built with deviations from the plans or schedule, is still deemed the same project. That clause matters on development work, where a stalled phase may restart a year later under a new contract amendment.

The ISO form works from a schedule. A project receives the separate aggregate only if it is a designated construction project shown in the schedule or the declarations. Some carriers write the schedule as all projects, others list jobs by name and address, and many use their own forms in place of the ISO wording. The difference shows up when a new contract is signed mid-term. If the policy lists projects by name, the new job may need an endorsement before it qualifies, and an owner who reads the certificate before that change is reading a promise the policy does not yet make.

Carrier forms also vary in how they handle limits. Some cap the total of all project aggregates, which turns a per-project promise into a shared pool at a higher level. Others exclude residential or wrapped projects from the schedule. Ask for the form number and edition, read the schedule and check whether any overall cap applies before telling an owner the requirement is met.

The location-based counterpart, CG 25 04, schedules locations instead of projects, which tends to fit insureds whose exposure sits at premises: owners of land, operating property and multiple parcels. A developer holding several tracts, a master-planned community with a sales office and model homes, or an owner with a yard next to the site may see per-location wording in its own program and in lender exhibits. Whether a phased subdivision is one location or several is a definition question, so it is worth settling before a claim.

The edges of a location are where problems start. Off-site improvements such as street widening, sewer extensions and off-site storm drain work are often physically outside the parcel the location schedule describes. Ask how the form defines a location, whether off-site work tied to the project is included and how a claim from a sold lot or a model home is charged. For a developer whose contractors carry per-project wording and whose own program carries per-location wording, the two should describe the same site in the same terms.

The CG 25 03 form says that payments for bodily injury or property damage within the products-completed operations hazard reduce the products-completed operations aggregate, not the general aggregate and not the project aggregate. In plain terms, the separate project limit protects the build. Once the work is finished and turned over, a defect-related claim on that job draws on the same completed operations aggregate as every other finished job in that policy year.

That gap is why many owner exhibits now ask for something more: a products-completed operations aggregate that also applies per project, or completed operations additional insured status for a stated period after completion. Few standard forms dedicate completed operations limits by project, so the answer may be a carrier endorsement, a project-specific policy or a wrap-up. If the exhibit asks for per-project completed operations limits and the program can't provide them, raise it before signing rather than after a certificate is rejected.

Aggregates reset only when the policy says they do. On an annual program, a new policy year usually brings new aggregates, including new project aggregates for scheduled jobs. On a project-specific policy written for the full construction term, the aggregate may apply once to the whole term unless the form reinstates it. Caltrans' published excerpts require that the liability policies contain an annual reinstatement of limits during construction operations, which a single-term project policy may not provide without an endorsement.

Public agencies also read the documents. Caltrans asks the successful bidder for copies of the general liability and excess policies, including declarations and endorsements, not only a certificate. For a contractor bidding agency work in several counties, it helps to keep the per-project endorsement, the schedule and the reinstatement wording in one file that can be sent at contract execution without a scramble.

Most exhibits require total limits that can only be met with an umbrella or excess layer above the primary policy. That layer usually lists the primary general liability in a schedule of underlying insurance and responds after the scheduled limits are paid or reduced. If the umbrella does not recognize the per-project aggregate as underlying, a large loss on one project may be treated differently by the umbrella than by the primary, and the owner's expectation of dedicated limits can break at the attachment point.

The umbrella's own aggregate is a separate question. Even when the primary carries per-project aggregates, the umbrella aggregate is often shared across every job. Some umbrella carriers will endorse a per-project aggregate, and some will not. Ask the question in writing, and if the contract demands dedicated limits at every layer, compare the cost of endorsing the annual tower with buying a project-specific excess layer for the job.

A certificate can show a per-project box checked, but the box is a summary. Owners and lenders who review insurance seriously ask for the endorsement itself, with the form number, edition and schedule. Lenders in particular may ask that the GC's aggregate apply per project so that claims on other jobs can't drain the limit protecting the collateral. A short package with the declarations page, the per-project endorsement, the additional insured endorsements and the umbrella schedule of underlying answers most of those questions at once.

Flow the requirement down the same way. A subcontractor with a modest annual aggregate and a dozen open jobs is the most likely to exhaust it, so the subcontract exhibit should ask for per-project wording and the GC should collect the endorsement before mobilization. Where a sub cannot obtain it, the documented alternative in the subcontract, such as a higher general aggregate, should be agreed in writing.