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Designated-premises endorsements are meant to limit an insurer's risk to occurrences at the primary business premises.When grappling with a designated-premises endorsement of a commercial general liability policy, claim professionals must consider both the nature of the insured’s premises and the nature of the insured’s business, which are not necessarily the same. The crux of the analysis is assessing what is “necessary or incidental” to the designated premises, and not confusing business operations with activities related to the premises.

Designated-premises endorsements are meant to limit an insurer’s risk to occurrences at the primary business premises used by an insured. A slip-and-fall accident in an insured’s parking lot that is attached to the insured’s designated premises would likely be covered. A sewage leak from a designated premises that causes property damage stretching several miles away may also be covered.

However, events or activities conducted by the insured that have no necessary or incidental relationship to the designated premises is another matter, even if related to business operations. Planning at the premises for offsite activities or events is not enough to bring claims arising from such activities within the coverage of a designated-premises endorsement.

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