Contrary to what some may believe, the designated construction project general aggregate limit endorsement (CG 25 03) does not apply to the policy’s products-completed operations aggregate. A broker reached out to me last week seeking my opinion on this to resolve an internal disagreement she was having with some of her colleagues.
A designated construction project general aggregate limit endorsement modifies a general liability insurance policy to enable the general aggregate limit to apply separately to designated construction projects. This can be an important feature in a policy, particularly for contractors that seek to comply with contractual requirements to maintain a specified amount of insurance applicable to a specific project. The endorsement, however, does not affect the policy’s products-completed operations aggregate; it only applies to ongoing operations. Just as the products-completed operations aggregate limit applies independently of the general aggregate limit on the policy and damages paid under the general aggregate limit do not erode the products-completed operations aggregate limit and vice versa, the CG 25 03 endorsement similarly does not affect the products-completed operations aggregate.