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3. CU-25-01

What the form is

The CU 25 01 Designated Project(s) Aggregate Limit endorsement is designed for use with Commercial Liability Umbrella and Excess insurance policies. Its primary function is to create a distinct, separate aggregate limit of insurance that applies to losses arising from specific projects designated in the endorsement's Schedule. This means that claims related to a named project will be subject to this dedicated aggregate, rather than solely drawing from the policy's overall general aggregate limit or other project/location aggregates. This endorsement helps to preserve the general aggregate limit for other exposures not related to the designated project(s).

Classes of business it applies to

This endorsement is particularly beneficial for businesses that undertake multiple, distinct projects, where there's a desire to isolate liability limits on a per-project basis. Examples include:

• Construction companies: A general contractor working on several large construction sites simultaneously can use this endorsement to assign a specific aggregate limit to each site.
• Real estate developers: Developers managing multiple distinct property development projects can benefit from separate aggregate limits for each venture.
• Manufacturing or service companies with large, distinct contracts: Any business undertaking significant, separate projects where individualized risk management for liability is prudent.

The endorsement is noted for not containing the word 'construction' in its title, allowing for more flexible use across various types of designated projects.

Special considerations

• Broadens Coverage: By providing a separate aggregate for designated projects, this endorsement helps prevent a single large loss at one project from exhausting the entire policy's aggregate limit, thereby preserving coverage for other operations or projects.
• Clear Project Definition: It is crucial to clearly and accurately describe each designated project in the Schedule of the endorsement to avoid ambiguity.
• Scope of Aggregate Limit: The Designated Project(s) Aggregate Limit applies to "ultimate net loss" under Coverage A. However, it explicitly does not apply to "bodily injury" or "property damage" arising out of the ownership, maintenance, or use of a "covered auto," or that which is included in the "products-completed operations hazard".
• General Aggregate Unchanged: This endorsement does not alter the amount of the General Aggregate Limit shown on the main policy declarations.

Key information for agents and underwriters

For Agents:

• Identify clients with multiple distinct projects (e.g., contractors, developers) who could benefit from segregated aggregate limits to protect their overall coverage.
• Explain how this endorsement can provide more robust protection by preventing one project's losses from depleting the entire umbrella/excess coverage.
• Ensure projects are accurately and comprehensively described in the Schedule.

For Underwriters:

• Carefully assess the risk associated with each designated project to determine an appropriate separate aggregate limit and any pricing implications.
• Verify that the project descriptions in the Schedule are clear and unambiguous.
• Understand that this endorsement is a coverage broadening feature, intended to avoid the erosion of other policy aggregates by losses at the designated project.
• Note the flexibility of the form due to the absence of 'construction' in its title, allowing for broader applicability.