Per location aggregate endorsement

A per-location aggregate endorsement is a policy modification used in a commercial general liability (CGL) policy that gives a separate aggregate limit to each property you own, rent, or operate out of, instead of sharing one aggregate across all your locations.

This endorsement prevents a major claim at one location from draining the coverage available to your other locations for the rest of the CGL policy period, which is typically one year. It protects your small business against three liability categories:

• Coverage A: Bodily injury and property damage pays for claims that your business injures someone or damages their belongings, like if a customer slips and falls at one of your clothing boutiques. This coverage also includes damage to premises rented to you, including a fire at one of your consulting firm offices.
• Coverage B: Personal and advertising injury covers claims of defamation and copyright infringement, like if a trainer at one of your gyms uses copyrighted music in social media ads without getting the artist’s permission.
• Coverage C: Medical payments, a type of "no-fault" insurance, pays for medical expenses if someone outside your business is injured, such as a customer getting cut by broken glass at one of your restaurants.

Form CG 25 04 is the same as a per-location aggregate endorsement. Here’s how it works in the insurance world:

• Per-location aggregate endorsement is the general term used for this type of coverage.
• CG 25 04 (Designated Location(s) General Aggregate Limit) is the standard Insurance Services Office (ISO) form that insurers attach to a policy to put this coverage into effect.

Each of your specific locations must be listed on the endorsement’s schedule or in the policy's declarations for the per-location limit to apply.

Let’s say that a franchise owner with three coffee shop locations has a general liability policy with a $1 million aggregate limit. During one policy period, they see the following claims:

• Shop 1: A customer is burned by a spilled hot beverage and needs medical treatment, resulting in a $250,000 claim.
• Shop 2: A faulty espresso machine leaks, damaging a neighboring tenant’s flooring, leading to a $720,000 settlement.
• Shop 3: A barista posts a bad review about a competing coffee shop chain that’s factually inaccurate, triggering a $600,000 defamation lawsuit.

Because the policyholder’s CG 25 04 per-location aggregate endorsement listed all three coffee shop locations, each shop would get a $1 million limit, allowing all of these claims to be covered.

It’s important to note that the per-occurrence limit would still apply. If any of those claims were to exceed that limit, the coffee shop owner would be responsible for the remainder, either paying out of pocket or getting additional coverage from an umbrella liability policy or an excess insurance policy.

A per-location aggregate endorsement plays a big part in risk management for businesses that own, rent, or operate out of multiple physical locations. It may be a contractual requirement from a landlord or franchisor, or you may just want the peace of mind if you own:

• A retail store chain, such as convenience stores, florists, or furniture stores, that needs to preserve coverage across each storefront.
• A restaurant franchise, including fast food spots, delis, and bakeries with multiple locations, needs to ensure one location’s incident can’t deplete the coverage needed for the others.
• A property management company with several real estate properties needs to prevent one property’s claim from reducing the coverage needed to protect the other properties.
• A manufacturing company, including breweries, metal manufacturers, and cabinet makers, should make sure every location has adequate protection, despite what might happen at the other locations.