Under the Home Day Care Coverage Endorsement of a Homeowner’s Policy, the limit of liability is?

The correct response is based on the structure of the Home Day Care Coverage Endorsement within a Homeowner’s Policy. This endorsement typically provides an additional layer of liability protection specifically for homeowners who operate a day care service from their residence.

The limit of liability is subject to an aggregate limit because the endorsement is designed to cover a specific type of risk that is inherently categorized differently from the standard coverage limits of a typical homeowners policy. This means that while there is coverage provided for incidents that may occur in the context of a home-based day care, there is a specified maximum amount that the insurer will pay out across all incidents within a given policy period. This is crucial for managing the insurer's risk while also providing adequate protection for the homeowner.

Although some policies might offer higher limits for certain coverages, the key aspect here is that there is a cap or limit imposed on total payouts, making it an aggregate limit rather than unlimited or purely state-dependent. This structure ensures that both the insured and the insurer understand the extent of coverage and potential liabilities involved in operating a home day care.