Aggregate Limit

Overview

The Aggregate Limit is the ceiling on total insurance payments during a policy period (typically one year). While the per-occurrence limit caps the payout for any single incident, the aggregate limit caps the total payout across all incidents combined. Once the aggregate is exhausted, the insured has no remaining coverage under that policy until it renews — regardless of how much per-occurrence limit remains unused.

How It Works

Consider a business with a Commercial General Liability policy that has a $1,000,000 per-occurrence limit and a $2,000,000 general aggregate. During the policy year:

• Claim 1: $400,000 injury claim. The insurer pays $400,000. Remaining aggregate: $1,600,000.
• Claim 2: $600,000 property damage claim. The insurer pays $600,000. Remaining aggregate: $1,000,000.
• Claim 3: $800,000 injury claim. The insurer pays $800,000. Remaining aggregate: $200,000.
• Claim 4: $500,000 injury claim. Even though this is below the $1M per-occurrence limit, only $200,000 of aggregate remains. The insurer pays $200,000. The insured is responsible for the remaining $300,000.

After Claim 4, the aggregate is exhausted. Any additional claims during the policy period receive no coverage — the insured is fully self-insured until the policy renews.

Types of Aggregates on the ACORD 25

The ACORD 25 shows two aggregate limits for Commercial General Liability:

General Aggregate: The total maximum for all claims except those falling under the products-completed operations category. This covers premises liability, ongoing operations, personal and advertising injury, and similar claims.

Products-Completed Operations Aggregate: A separate aggregate that applies only to claims arising from the insured's products or from operations after the work is completed. This is particularly important in construction because defect claims and post-completion injuries draw from this aggregate, not the general aggregate.

Having separate aggregates is protective — a flurry of premises liability claims will not erode the coverage available for completed operations claims, and vice versa.

Aggregate Applies Per: Policy, Project, or Location

The ACORD 25 includes checkboxes indicating how the general aggregate applies:

• Per Policy: The aggregate is shared across all the insured's operations, all projects, all locations. This is the default and the least protective for individual certificate holders.
• Per Project: Each project gets its own aggregate. Claims on one project do not reduce the aggregate available for another project. This is strongly preferred in construction.
• Per Location: Each location gets its own aggregate. Preferred in property management where multiple buildings are involved.

A per-project aggregate is significantly more protective than a per-policy aggregate. If a vendor has a $2M per-policy aggregate and works on 10 projects, a large claim on any one project reduces the aggregate available to all other projects. With a per-project aggregate, each of your projects has a dedicated $2M available.

Why It Matters for Compliance

The aggregate limit is often overlooked in compliance verification. Reviewers check the per-occurrence limit against their requirement and move on. But the aggregate determines total available coverage, and it can be eroded by claims you know nothing about.

Key compliance checks:

1. General Aggregate meets your minimum (typically 2x the per-occurrence limit, so $2,000,000 for a $1M per-occurrence policy)
2. Products-Completed Operations Aggregate is adequate for construction-related compliance
3. Aggregate basis is per-project or per-location if your contract requires it

Example

A property owner requires a $2,000,000 general aggregate from all vendors. A vendor's certificate shows $1,000,000 each occurrence and $2,000,000 general aggregate, with the "Per Policy" checkbox marked. The aggregate meets the dollar requirement, but the property owner prefers a per-project aggregate. The vendor's current aggregate is shared across all the vendor's clients and projects. The property owner may accept this or negotiate for a per-project endorsement depending on the vendor's risk level and the contract terms.