Aggregate Limit of Insurance
What is the Aggregate Limit?
The aggregate limit is the most your insurance will pay for business-related accidents during your policy period.
Think of it like a piggy bank for your business protection. All the money in the piggy bank is your aggregate limit of liability — the maximum your insurer will spend covering claims while your policy is active (which is usually one year).
Every time a claim is paid, money comes out of the aggregate limit piggy bank. Once it’s empty, your coverage pauses until the piggy bank refills at the start of the next policy period.
What Does “Aggregate” Mean in Insurance?
In insurance, “aggregate” simply means total. Your aggregate limit of liability is your total protection fund for all claims in a policy period. Every time something goes wrong during the year — a client slips, property is damaged, or a lawsuit happens — the money to pay for it comes from your aggregate limit.
What Happens If I Hit My Aggregate Limit and Need to File a Claim?
You can use your aggregate as often as you need to, but once you hit your limit, you’re out of funds for the year. If you file a claim after your aggregate limit is used up, it won’t be covered. Once your policy limits reset, you’ll be able to file claims again.
Can I Increase My Aggregate Limit of Insurance?
Some insurance policies let you buy more coverage. (It’s like adding extra coins to your piggy bank now so you have more to spend later.) This is called “excess liability” — a fancy way of saying “higher limits.” Check for an Insurance Canopy coverage page that matches your industry to see if higher limits are available. Or, contact our customer service team for help.
When Does My Policy’s Aggregate Limit Reset?
Most policies’ aggregate limit of liability resets after one year, but there are exceptions. Insurance Canopy also offers short-term event policies for gig musicians, bartenders, vendors, and more that last a few days.
Aggregate vs Occurrence Limit: What’s the Difference?
Your insurance policy usually lists two limits: an aggregate limit and an occurrence limit. For example:
Think of these two limits as a smaller piggy bank (the occurrence limit) inside of a bigger one (the aggregate limit).
- The general aggregate in insurance is the total fund for all claims in a year.
- The occurrence limit is the max amount you can spend on a single claim.
Here’s how it benefits you: The occurrence limit keeps one big claim from wiping out your whole fund. Even if one claim hits its limit, the remaining aggregate in your insurance is still available for other claims.
Aggregate Limit vs. Per-Occurrence Limit Explained
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| Feature | Aggregate Limit | Per-Occurence Limit |
|---|---|---|
What It Means |
The maximum amount your insurance will pay for all claims combined during your policy period (usually a year). |
The maximum amount your insurance will pay for a single claim or incident. |
Example |
If your aggregate limit is $2M, and you have three claims in one year totaling $2.2M, the insurance will only pay $2M total. |
If your per-occurrence limit is $1M, and you have a single claim for $1.5M, your insurer will only pay $1M for that incident. |
How It Works |
Acts like a total “spending cap” for the policy term. Once it’s reached, no more claims are covered. |
Applies to each separate claim, regardless of how many you have, until you hit the aggregate limit. |
Common Policy Setup |
$2M aggregate limit |
$1M per-occurrence limit |
Related Terms
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Chris Van Leeuwen | VP of Agency Development
Chris Van Leeuwen is the VP of Agency Development for Insurance Canopy. He has held the prestigious Certified Insurance Counselor (CIC) designation since 1996.
Because he strongly believes in the importance of helping business owners understand their insurance coverage, Chris uses his wealth of experience to offer insights to small business owners across the country who are looking to navigate business liability insurance.
Chris Van Leeuwen is the VP of Agency Development for Insurance Canopy. He has held the prestigious Certified Insurance Counselor (CIC) designation since 1996.
Because he strongly believes in the importance of helping business owners understand their insurance coverage, Chris uses his wealth of experience to offer insights to small business owners across the country who are looking to navigate business liability insurance.