Commercial General Liability Limits
Commercial general liability limits typically have more than one limit of liability depending on the type of coverage. These two limits are designed to specify how much money the insurer is willing to pay, in total, for damages that result from covered causes of loss (insurance claims). Further, there may also be differing limits for medical payments to other coverage, which is a type of no-fault insurance.
Free Business Insurance Comparison
Compare Quotes From Top Companies and Save
Secured with SHA-256 Encryption
Jeffrey Johnson
Insurance Lawyer
Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...
Insurance Lawyer
UPDATED: Sep 11, 2023
It’s all about you. We want to help you make the right coverage choices.
Advertiser Disclosure: We strive to help you make confident insurance decisions. Comparison shopping should be easy. We are not affiliated with any one insurance provider and cannot guarantee quotes from any single provider. Our insurance industry partnerships don’t influence our content. Our opinions are our own. To compare quotes from many different companies please enter your ZIP code on this page to use the free quote tool. The more quotes you compare, the more chances to save.
Editorial Guidelines: We are a free online resource for anyone interested in learning more about life insurance. Our goal is to be an objective, third-party resource for everything life insurance related. We update our site regularly, and all content is reviewed by life insurance experts.
UPDATED: Sep 11, 2023
It’s all about you. We want to help you make the right coverage choices.
Advertiser Disclosure: We strive to help you make confident insurance decisions. Comparison shopping should be easy. We are not affiliated with any one insurance provider and cannot guarantee quotes from any single provider. Our insurance industry partnerships don’t influence our content. Our opinions are our own. To compare quotes from many different companies please enter your ZIP code on this page to use the free quote tool. The more quotes you compare, the more chances to save.
On This Page
You may or may not know that commercial insurance policies typically have more than one limit of liability associated with differing coverage.
For example, a commercial general liability policy may have a separate limit of liability for premises and operations coverage, personal and advertising injury, and products and completed operations, all of which are separate coverage types.
Further, there may also be differing limits for medical payments to others coverage, which is a type of no-fault insurance.
All coverage is subject to an “each occurrence” (also referred to as a “per occurrence”) and an “aggregate” liability limit.
These two limits are designed to specify how much money the insurer is willing to pay, in total, for damages that result from covered causes of loss (insurance claims).
Let’s explore what these terms mean with regard to a commercial insurance policy.
What is covered under a commercial general liability insurance policy?
The exact make-up of a commercial general liability policy will vary depending on the insurance provider and the coverage options chosen by the insured. However, the basic coverage for this type of policy includes:
- Bodily injury and property damage liability coverage
- Personal and advertising injury coverage
- Medical payments coverage
Read more: Liability vs. Medical Payments Coverage
This policy pays for medical expenses if an employee or customer is hurt inside your business or as a result of one of your employee’s actions. It will also cover legal costs associated with a personal injury, wrongful termination, or other type of lawsuit.
Your business liability insurance company may have additional coverage options available, such as damage to premises rented coverage, errors and omissions insurance, and liquor liability insurance.
Commercial liability insurance policies are vital for businesses. Without this type of coverage, your business could easily go bankrupt after a single injury or property damage incident.
Compare Quotes From Top Companies and Save
Secured with SHA-256 Encryption
What is an “each occurrence” liability limit?
It’s possible to have multiple claims made against a policy within a single 12-month policy term.
The “each occurrence” limit is the maximum amount an insurer will pay for damages resulting from one claim or from a single claim.
Imagine if a convenience store (a very unlucky one) were to have two claims in the same year.
Each liability claim would be subject to a maximum pay out for damages. Both insured parties would be able to collect a maximum of $100,000 in damages if the “each occurrence” limit was $100,000.
In fact, up to $100,000 in insurance money would be available to an unlimited number of injured claimants within the term of a single insurance policy.
The claims payments could easily get out of control in the event multiple people were hurt throughout the course of one policy term.
Insurance policies have a stop-gap in place to protect the insurance company from the potential of multiple claims in one year; known as the policy aggregate limit.
What is an aggregate liability limit?
Commercial insurance policies are subject to an aggregate liability limit in order to protect themselves against paying for multiple liability claims within a policy term.
The aggregate limit is the maximum amount of money an insurer will pay for covered claims within one policy period…regardless of how many claims are filed.
Let’s assume the convenience store’s liability policy had an aggregate limit of $300,000.
Perhaps as many as five different people sued the store for $100,000 in five separate occurrences.
The insurance policy would respond to each claim by paying the necessary amount of damages until the policy aggregate limit was reached.
No individual would be able to collect more than $100,000 (the “each occurrence” limit).
Once the policy aggregate limit was reached, the insurer would wipe their hands of additional claims, leaving the store owner to settle (and hopefully keep their floor dry from now on).
As discussed above, there are multiple different liability limits available on commercial insurance policies.
Look closely at your insurance contract and contact your insurer or insurance agent if you have any concern regarding your coverage limits.
Commercial liability premiums vary, so get insurance quotes from multiple companies before choosing a policy.
Compare Quotes From Top Companies and Save
Secured with SHA-256 Encryption
Jeffrey Johnson
Insurance Lawyer
Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...
Insurance Lawyer
Editorial Guidelines: We are a free online resource for anyone interested in learning more about life insurance. Our goal is to be an objective, third-party resource for everything life insurance related. We update our site regularly, and all content is reviewed by life insurance experts.