Each Occurrence Limit

Overview

The Each Occurrence Limit is the maximum amount an insurer will pay for a single covered event or claim. It is the most important limit to verify on a Certificate of Insurance because it represents the maximum protection available for any individual incident.

How It Works

When an insured event occurs — say a contractor causes $750,000 in property damage — the insurance company will pay up to the each occurrence limit. If the limit is $1,000,000 and the claim is $750,000, the full claim is covered. If the claim exceeds $1,000,000, the insured is responsible for the excess (unless they carry an Umbrella or Excess Liability policy).

Each Occurrence vs. General Aggregate

These two limits work together:

• Each Occurrence: Maximum per incident
• General Aggregate: Maximum across all incidents during the policy period

For example, a policy with $1M each occurrence and $2M general aggregate can pay up to $1M per incident but no more than $2M total across all incidents in the policy year.

This means if a vendor has already had significant claims, their remaining aggregate may be less than their per-occurrence limit — a subtlety that is impossible to verify from the COI alone.

Common Requirements

Most commercial contracts specify a minimum each occurrence limit. Typical minimums by industry:

On the ACORD 25

The each occurrence limit appears in the limits column next to the General Liability coverage row. It is typically the first limit listed and the easiest to locate on the form.

Example

A property manager requires all vendors to carry at least $1,000,000 in General Liability per occurrence. A vendor's COI shows a $500,000 each occurrence limit. The vendor is non-compliant and must either increase their limit or obtain an Umbrella policy that brings the total per-occurrence coverage to $1,000,000 or more.