What is a per project aggregate endorsement, and why does my MSA ask for it?

A general liability policy has a per-occurrence limit and an annual general aggregate. IRMI describes the general aggregate as "the maximum limit of insurance payable during any given annual policy period for all losses," other than certain specified exposures.

For a service contractor working for several operators, that shared aggregate is a real issue. A large claim on one operator's lease in March reduces what is left for every other operator for the rest of the policy year. From the operator's side, your limit is only as good as what your other jobs have not used up.

A per project aggregate fixes that by giving each designated project its own aggregate.

The ISO form CG 25 03 (05 09 edition) applies to Coverage A damages and Coverage C medical expenses "which can be attributed only to ongoing operations at a single designated construction project" shown in the schedule. For those claims:

1. A separate Designated Construction Project General Aggregate Limit applies to each designated project, equal to the general aggregate in your declarations.
2. Payments for that project reduce only that project's aggregate. They do not reduce the general aggregate in the declarations or any other project's aggregate.
3. The each occurrence, damage to premises rented to you and medical expense limits still apply, but they become subject to the project aggregate instead of the policy aggregate.

The form is just as specific about what it does not do:

• Claims that cannot be attributed only to ongoing operations at a single designated project reduce the regular general aggregate or the products-completed operations aggregate, whichever applies.
• Payments for bodily injury or property damage in the products-completed operations hazard reduce the products-completed operations aggregate, not any project aggregate.
• A project that is abandoned, delayed, or restarted, or that deviates from plans, is still treated as the same project.

ISO has two companion forms.

When an MSA asks for "aggregate limits on a per project basis" or "per location basis," check these points:

• Which form is on your policy? CG 25 03, CG 25 04, or an insurer's own version. The schedule matters: one published copy of CG 25 03 applies to "all construction projects of the named insured," while others apply only to the projects listed.
• Does it fit the work? A form written for construction projects may not clearly describe ongoing lease maintenance across many wells.
• Completed operations. The ISO form does not give each project its own products-completed operations aggregate. If the MSA expects that too, it needs separate wording.
• The umbrella. A GL endorsement changes the GL. Ask whether your umbrella's aggregate works the same way or is shared across all jobs.
• The certificate. Prequalification reviewers look for the endorsement. A remark on the certificate does not add it to the policy. See why a certificate gets rejected.

Per project aggregates are one more reason the insurance exhibit in your MSA has to be compared line by line with your actual endorsements. See the MSA insurance requirements guide.