What is the difference between per policy, per project, and per location on a commercial general liability policy? What is the implication of these different limits on a policy?
The CR Solutions Certificate Tracking Team reviews certificates of insurance from subcontractors participating in either CIP programs or traditional insurance projects. Their main purpose is to ensure that the requirements set by the General Contractor or Owner for the project are met. Often, project teams request a “per project” insurance requirement. However, is that requirement always relevant?
Friendly Reminder: A checked box on a certificate of insurance does not automatically extend coverage. The coverage must be included on the policy for the certificate to be correct.
Let’s look at the details of each policy limits:
POLICY: If the PER POLICY box is checked on the certificate of insurance, that means the policy aggregate limit is $2,000,000 for the entire policy period listed on the COI. The project requirement is often set as “per project,” but “per policy” isn’t necessarily bad depending on the contractor’s scope of work. For instance, an architect, who is going to mainly rely on their Professional liability, would more than likely carry per policy on their General Liability.
PROJECT: A per PROJECT aggregate means that the aggregate would apply to each individual project a subcontractor may be working on. This is highly desirable coverage for general contractors and project owners. They would prefer that the coverage not be eroded by claims on other projects. Therefore, this requirement is made by General Contractors/Owners on most projects that CR Solutions administers. It is important to remember that the policy must be endorsed to show that the aggregate is per project.
LOCATION: Per location aggregate limits applies only to those locations that are owned or rented by the named insured/policyholder and will always exclude worksite project locations. This coverage would extend to the main office, satellite offices, retail locations, warehouses, etc. However, the same caveat applies here. Checking the box does not extend the coverage to other locations. The per-location aggregate endorsement must be on the policy for coverage to exist. This type of coverage would make sense for a supplier or manufacturer that does all their work on their own premises.
This is just a brief overview of the different aggregate limits that may be present on a commercial general liability policy. As the insurance world and case law is continually evolving, there is always more to learn and stay current with. That said, the great thing about working with CR Solutions is that, as our client, you leave that all to us! For a proposal for insurance tracking services, please visit: https://info.c-r-solutions.com/certify
About the Author:
Amy Lamb is an Account Executive at CR Solutions and is based out of company headquarters in Alpharetta, GA. Follow Amy on Linkedin to stay up to date on recent insurance risk management articles and insights.