Per-Project vs Per-Occurrence Aggregate: Protecting Your Roofing Business Across Multiple Jobs
Every general liability policy has two key limits: the per-occurrence limit and the general aggregate limit. The per-occurrence limit is the most your policy pays for any single claim. The general aggregate is the most your policy pays for all claims combined during the policy period. For roofing contractors who work on multiple projects simultaneously, understanding how the aggregate applies can mean the difference between full protection and a dangerous coverage gap.
How the Standard Aggregate Works
With a standard GL policy, your aggregate limit is a single pool shared across your entire operation for the policy year. If you carry $1M per occurrence and $2M aggregate, you have $2M total to cover all claims from all jobs during the year. If a claim on a February job costs $800,000 and another claim on a June job costs $900,000, you have used $1.7M of your $2M aggregate. Any additional claims for the rest of the year are covered only up to the remaining $300,000.
For a residential roofer doing 100 small re-roofing jobs per year, this is usually not a problem. Claim frequency is relatively low, and individual claim severity on residential jobs rarely approaches $1M. But for a commercial roofer running three or four large projects simultaneously, the risk of multiple claims eroding the aggregate is real and dangerous.
How Per-Project Aggregate Works
A per-project aggregate endorsement (typically CG 25 03 or equivalent) modifies your policy so that the general aggregate limit applies separately to each project or job site. With $1M per occurrence and $2M per-project aggregate, each of your active projects has its own $2M aggregate pool. A $1.5M claim on one project does not reduce the available aggregate on any other project.
This is critically important when you consider a scenario like this: You are simultaneously working on a $350,000 apartment complex re-roof and a $200,000 warehouse roof replacement. A worker on the apartment project accidentally drops a tool that injures a tenant, resulting in a $600,000 bodily injury claim. Two weeks later, your crew on the warehouse project causes a fire while using a hot kettle, damaging $400,000 in stored inventory. With a standard aggregate, those two claims total $1M and consume half your $2M aggregate. With per-project aggregate, each project has its own $2M aggregate, and neither claim affects the coverage available on the other project.
Contract Requirements
Most commercial GC contracts require per-project aggregate. The reason is simple: the GC does not want your coverage for their project depleted by a claim on a completely unrelated job across town. When a GC hires you to re-roof a school building, they want to know that the full $2M aggregate is available for claims arising from that specific project, regardless of what happens on your other jobs.
If your contract requires per-project aggregate and you do not have the endorsement, you are in breach of contract. The GC may not discover this until a claim arises, at which point the coverage gap becomes a legal and financial problem for both of you. Always verify that your policy matches your contractual requirements before signing.
Cost of the Endorsement
The per-project aggregate endorsement is one of the most affordable additions to a roofing contractor's GL policy. It typically costs $200 to $800 per year, depending on your carrier and the size of your operation. For a commercial roofer paying $10,000 per year in GL premiums, adding $400 for per-project aggregate represents a 4% increase for significantly enhanced protection.
When you compare this cost to the risk of having your aggregate depleted mid-year, the math is obvious. A single large claim without per-project aggregate could leave you unable to fulfill your insurance obligations on every other active project, potentially triggering contract defaults and loss of all your active jobs.
Products and Completed Operations Aggregate
It is important to note that the per-project aggregate endorsement typically modifies the general aggregate, not the products and completed operations aggregate. The products/completed operations aggregate is a separate limit that applies to claims arising from your finished work. Most per-project endorsements do not extend the products/completed operations aggregate on a per-project basis.
This means that while each active project gets its own aggregate during construction, claims arising after all projects are complete still share a single products/completed operations aggregate. For roofers, completed operations claims, such as a roof leak discovered months after installation, are common. Ask your agent how the per-project endorsement interacts with your completed operations aggregate.
Tracking Your Aggregate Usage
Whether you use standard or per-project aggregate, you should track your aggregate usage throughout the policy year. If you have a significant claim early in the year, ask your agent for an aggregate status report. Some carriers provide online portals where you can check remaining aggregate in real time. If your aggregate is getting low, you may need to purchase additional aggregate through an endorsement or consider an umbrella policy to fill the gap.
Which Should You Choose?
If you do any commercial work or work under GC contracts, add the per-project aggregate endorsement. The cost is minimal, the protection is significant, and it is almost certainly required by your contracts. If you are strictly a residential roofer doing small jobs with no GC involvement, the standard aggregate is typically sufficient, but the per-project endorsement is still a worthwhile investment for peace of mind. It is one of the cheapest ways to improve your overall insurance program.