Aggregate Limit

An aggregate limit is the total maximum amount a policy will pay across all claims during the policy period, typically one year, regardless of how many separate incidents occur.

How does an aggregate limit work on a liability policy?

Once the aggregate is exhausted, the carrier owes nothing more for additional claims that year, no matter how many separate incidents occur or how large they are individually. A common commercial general liability structure carries a $1,000,000 per-occurrence limit and a $2,000,000 annual aggregate. That means no single claim can exceed $1 million, and no matter how many claims occur during the year, the carrier’s total exposure stops at $2 million.

For example, if three claims of $800,000, $700,000, and $300,000 file in the same policy year, the carrier pays $2 million in total and the third claimant receives only $500,000, the remaining aggregate balance, rather than the full amount of the third claim.

Why do high-frequency businesses need to pay close attention to aggregate limits?

For businesses in high-frequency claim environments, the aggregate limit matters as much as the per-occurrence limit. A restaurant that sees multiple slip-and-fall claims in a single season, or a contractor generating several related disputes on a large project, can exhaust the aggregate before the year ends. At that point, additional claims are uncovered unless the business carries an umbrella or excess policy on top of the general liability policy. Most businesses treat the aggregate as a starting point, not a ceiling, and back it with excess capacity.

How do sub-aggregates inside a policy interact with the main aggregate?

A commercial general liability policy often carries separate aggregates for products and completed operations, coverage that responds after a contractor finishes a job or a manufacturer ships a product. Those sub-limits and sub-aggregates erode independently of the general aggregate. A business with both ongoing operations and a product line may find one bucket depleted while the other still has capacity, so tracking both matters throughout the year.

For example, a Georgia manufacturing company that files multiple product liability claims mid-year may exhaust its products aggregate while its general operations aggregate remains intact, leaving a gap in product-related coverage for the rest of the policy year.

What does aggregate limit mean for professional liability policies?

Professional liability policies, errors and omissions coverage for consultants, accountants, technology firms, and similar service businesses, typically run on a claims-made basis with their own per-claim and aggregate limits. Georgia businesses in regulated professional fields should confirm the aggregate reflects the realistic volume and severity of disputes in a given year, not just the minimum required by a client contract or a state licensing board.

What are the options when an aggregate runs short mid-year?

When aggregate capacity runs short mid-year, options are limited. Purchasing additional limits mid-term is possible but often expensive, and some carriers require underwriting approval before increasing limits on a policy already seeing claims activity. Sizing the aggregate correctly at renewal, before losses accumulate, is the more reliable approach. A free coverage review through Olive Insurance Services, LLC can review your aggregate structure and identify gaps before a claim forces the conversation.