Sublimit

A sublimit sets a lower ceiling for one kind of claim inside a bigger policy. Your policy might have a $1 million limit, but if a certain type of loss has a $100,000 sublimit (illustrative figures), $100,000 is the most you’d get for that loss, even with plenty of the main limit left.

How it works

A sublimit is usually part of the overall limit, not extra money on top of it. A payment under a sublimit typically also counts against the policy’s main limit.

You’ll often find sublimits on:

• cyber insurance, for losses like social engineering fraudSocial engineering fraudSocial engineering fraud is a scam where criminals pose as someone you trust, such as a supplier or coworker, to trick you into sending money or sensitive information.Read the definition or ransomware payments
• commercial property, for items like outdoor signs, valuable papers, cash, or property away from your premises
• general liability, where medical payments and damage to premises you rent carry their own smaller limits

Some sublimits are listed on the 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. Others sit inside coverage extensions or endorsementsEndorsementAn endorsement is a written change to an insurance policy that adds, removes or modifies coverage, such as adding an additional insured or a new location.Read the definition, which makes them easy to miss.

Why it matters for a small business

A sublimit can matter more than the headline number. When you compare quotes, or check a policy against a contract, look for the sublimit on the risk you worry about most. A quote with a higher main limit but a lower sublimit for that risk may protect you less.

An example