For various types of insurance, an aggregate limit is the maximum amount of money an insurer will pay for all your covered losses during the policy period, typically one year. Show If you suffer a loss (e.g., damage to your business property or a customer injury on your premises), you must file a claim with your insurer to receive benefits under your small business insurance policy. The maximum amount of money your insurer will pay for all the claims you file during the policy period, typically one year, is known as your aggregate limit. Aggregate limits are distinct from per-occurrence (or per-claim) limits. These refer to the maximum amount an insurer will pay for a single claim or incident. When the value of your total claims exceeds your aggregate limit, you will have to pay the difference out of pocket. Compare small business insurance quotes from top U.S. carriers Aggregate limits are a policy feature that meets the needs of both insurance customers and insurance carriers. They meet your needs because they give you the ability to customize your insurance to reflect your risk exposure and budget. If you face modest risks and have a limited budget, purchasing a policy with lower limits will keep you safe, while lowering your premiums. If you have substantial risks and a sufficient budget, you can increase your limits to provide more protection for a higher premium. Insurance companies use aggregate limits to reduce their exposure to catastrophic customer losses. This allows them to keep their premiums affordable while making sure their finances remain strong. A commercial general liability insurance policy covers a wide range of liability loss exposure that can be faced by various organizations. Most importantly, a commercial general liability is a foundation for most of the liability insurance policies of the organization liability insurance policies. General liability and umbrella liability are two broad categories of commercial general liability insurance policies, which offer coverage to the insured concerning those claims which arise due to third-party bodily injury or property damage. Umbrella insurance is an extra liability insurance cover that offers protection against various claims and lawsuits. It means the policy plays a crucial role by offering you coverage over and above your liability insurance policy. The umbrella insurance policy becomes active as soon as the liability limit on other insurance policies is exhausted. A general aggregate is the maximum limit of coverage that applies to the commercial general liability insurance policy. Under commercial general liability insurance, the general aggregate limit is applied to the covered bodily and property damage and all covered personal & advertising injury. When paid losses in these categories reach the aggregate limit, the insurer considers those limits to be exhausted, and no further losses in any of those categories are paid under commercial general liability insurance. The general aggregate limit restricts the amount that would be paid by the commercial general liability insurance policy, irrespective of the number of claims and occurrences. On the other hand, umbrella liability policies will respond to those claims which arise in case of a catastrophic loss that is more than the per occurrence limit under the primary commercial general liability insurance policy. An Umbrella insurance policy is an additional amount of coverage that is offered once the underlying limit of the general liability insurance is exhausted. Usually, an umbrella policy is sold as an individual insurance policy. In the event, that the series of claims have exhausted the general aggregate limit, the umbrella policy will cover the other claims. There are certain situations as well when the umbrella policy also covers those claims which are not covered by the primary general liability insurance policy. Case Since 2010, K.S Construction has established itself as a leading player in the construction market. So far, the company has completed various commercial and residential projects across India. Last year, the company got a contract of constructing a four-story office building in Pune for J.K Jewels. When the construction was in full swing, J.K Jewels sent one of its members, Mr. Jivesh Singh, from the top management to visit and inspect the site. Unfortunately, when Jivesh was inspecting the construction site, he tripped over the electric cord and fractured his leg and arms. Read more: Who is Insured under Commercial General Liability Insurance? Here, Jivesh filed a case against K.S Construction and claimed that the accident occurred because the company did not follow safety regulations at the site. Luckily, the construction company had commercial general liability insurance, and therefore, it approached the insurer for the claim settlement. Here, the total claim amount was Rs 1 crore, including compensation and medical expenses. However, the commercial general liability had coverage of Rs 50 lakh, and therefore, the remaining Rs 50 lakh had to be paid by the construction company itself. In this case, the general aggregate limit was Rs 50 lakh, and therefore, the insurer did not pay anything when this limit was crossed. However, here the situation would have been different if the construction company had an umbrella insurance policy. In this case, the umbrella policy would have helped in covering that amount which was above the general aggregate limit of the commercial general liability insurance policy. It means, here, the umbrella insurance policy would have covered the remaining Rs 50 lakh and the construction company would not have to pay anything on its own.
What is the aggregate limit in a commercial general liability policy?The aggregate limit is the total claim costs an insurer will cover during a policy period, which is typically one year.
What does General Aggregate Limit mean?The general aggregate limit of liability refers to the most money an insurer can pay to a policyholder during a specified period. These limits are contained in the contracts of commercial general liability (CGL) and professional general liability insurance policies.
What is an aggregate liability policy?Aggregate Limit of Liability — an insurance contract provision limiting the maximum liability of an insurer for a series of losses in a given time period—for example, a year or for the entire period of the contract. Sometimes called "annual aggregate limit."
What limits aggregate limit?An aggregate limit is a maximum amount an insurer will reimburse a policyholder for all covered losses during a set time period, usually one year. Insurance policies typically set caps on both individual claims and the aggregate of claims.
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