Aggregate Limit
The maximum total amount an insurance policy will pay out across all claims during the policy period, regardless of how many individual losses occur.
An aggregate limit is the ceiling on what an insurance policy will pay across all claims during the policy period, usually one year. It is distinct from the per-occurrence limit, which caps a single claim.
How Aggregate Limits Work
On a policy with a $2M aggregate and a $1M per-occurrence limit, a single catastrophic claim can consume up to $1M. A second claim can consume another $1M. A third large claim in the same policy period would not be covered, because the aggregate has been reached. Smaller claims add up the same way. Every payment the carrier makes reduces the remaining aggregate until the policy period ends or the limit is restored.
Where Aggregate Limits Appear
Commercial general liability, contractor liability, and builders risk policies almost always include aggregate limits. They are uncommon on personal homeowners coverage, which usually resets per event or per coverage category. Contractors who carry liability insurance should know both their per-occurrence and aggregate limits, because a mid-year loss can quietly erode the capacity available for the rest of the year.
Why Contractors and Adjusters Track It
For restoration contractors working under an active liability policy, a busy claims year can push total payouts close to the aggregate. That matters at renewal: a carrier seeing heavy aggregate utilization may raise premiums, tighten terms, or decline to renew. Tracking aggregate consumption throughout the year is part of responsible insurance management, not just a problem for the broker to solve at renewal.
Frequently asked questions
The occurrence limit is the maximum paid for a single event. The aggregate limit is the maximum paid across all events during the policy period. A policy might have a $1M per-occurrence limit and a $2M aggregate, meaning two separate large claims could exhaust the annual cap.
Most personal homeowners policies do not apply a traditional aggregate limit the way commercial liability policies do. Coverage limits reset per event or per category. Commercial general liability and builders risk policies commonly use aggregate limits.
Once the aggregate is fully paid out, no further claims are covered under that policy for the remainder of the policy period. The insured must renew or purchase additional coverage to restore limits.
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