Per-occurrence limit

The per-occurrence limit caps what your policy pays for any one accident or event. On a general liability policy written as “$1M / $2M” (illustrative figures), the first number is usually the per-occurrence limit and the second is the aggregate limitAggregate limitAn aggregate limit is the most a policy will pay for all covered claims combined during one policy period, no matter how many claims you have.Read the definition for the policy periodPolicy periodThe policy period is the span of time between a policy’s start and end dates, usually 12 months, during which its coverage is in force.Read the definition.

How it works

An occurrence is generally an accident, including repeated exposure to the same harmful conditions. Everything that comes from that one event counts against a single per-occurrence limit: injuries to several people, damage to several properties and every lawsuit that follows.

Each payment also draws down the aggregate. So the per-occurrence limit is the ceiling for one bad event, and the aggregate is the ceiling for the whole policy period.

Some details vary by policy:

• Many general liability policies pay defense costs in addition to the limits, so lawyers’ fees don’t use them up. Many professional liability policies count defense costs against the limit instead.
• Some coverages inside the policy, like medical payments and damage to premises you rent, have their own smaller limits, which work like a sublimitSublimitA sublimit is a smaller cap within a policy’s overall limit that applies to one specific type of loss or coverage, and it doesn’t add to the overall limit.Read the definition.
• Leases and client contracts often set the minimum per-occurrence limit you must carry.

An example

Where you’ll see it

The per-occurrence limit is on your declarations pageDeclarations pageThe declarations page is the summary at the front of an insurance policy listing who’s insured, what’s covered, the limits, deductibles, premium and policy dates.Read the definition and on your certificate of insurance, usually labeled “each occurrence.”