Per Occurrence vs. Aggregate Limits

A per occurrence limit is the maximum amount your insurer will pay for one claim. An occurrence is typically one incident or accident that causes covered damages, so per occurrence limits apply on a per event basis. For example, if your general liability insurance policy has a $1 million per occurrence limit, then $1 million is the most the insurer will pay for that single covered claim, even if the total damages and legal costs end up higher.

In practice, it can look something like this for a common slip and fall claim under standard general liability insurance:

• Policy limits: $1M per occurrence
• Slip-and-fall claim total cost: $1.3M
• Policy can pay: up to $1M
• Remaining amount: $300K not covered by the per occurrence limit

This is designed to cap coverage for one high-cost incident.

An aggregate limit is the maximum total amount your insurer will pay for all covered claims combined during the policy period. Unlike a per occurrence limit that resets with each claim, an aggregate limit works more like a yearly coverage cap. Each covered payout reduces the amount available for future claims until the policy renews.

Per occurrence and aggregate limits work together to cap what a policy can pay for one claim and across the policy period. While the per occurrence limit applies each time there’s a covered incident, the aggregate limit can be reduced over time by multiple claims. How this works can vary by policy type and structure and some coverages share the same aggregate, while others have separate aggregate buckets.

• Shared Aggregate Example: A $1M per occurrence / $2M aggregate liability policy pays $900K for Claim 1 and $800K for Claim 2 (both under $1M), leaving $300K remaining in the aggregate for the rest of the policy period.
• Separate Aggregate Example: A general liability policy often has a general aggregate and a separate products-completed operations aggregate. If products-related claims reduce the products-completed operations aggregate, the policy may still have coverage available under the general aggregate for other liability claims.

Per occurrence limits cap coverage per claim, while aggregate limits cap coverage over the full policy period. Since limit structures can vary across policy types, the way these limits work together may differ by coverage. Use this mental model when reviewing quotes or existing policies to understand what your coverage can actually pay.