How do CDMOs handle multi-sponsor aggregate exhaustion?

Aggregate exhaustion is one of the highest-impact structural risks a multi-sponsor CDMO faces. A standard occurrence CGL has a per-occurrence limit (e.g., $1 million) and an aggregate limit (e.g., $2 million products / $2 million general). One large sponsor claim can exhaust the aggregate, leaving zero coverage for every other sponsor on the panel for the rest of the policy year. Sponsor MSAs that require minimum coverages do not care that another sponsor exhausted the limit - the CDMO is non-compliant.

The structural fix is a per-project or per-location aggregate endorsement (industry form CG 25 03 or CG 25 04 for general liability, or carrier-specific manuscript endorsements for products). These endorsements reset the aggregate for each project or each facility location, so claims under one sponsor relationship do not draw down the limits available for others.

A second-best fix is to use a per-sponsor excess layer above the primary. Each sponsor relationship sits in its own excess silo, isolating claim exposure. This is more expensive but cleaner than the endorsement approach when sponsor relationships are large and the carrier prefers not to issue per-project aggregate.