Per occurrence and aggregate are the two primary limit structures in liability insurance. Understanding the difference - and why both must independently satisfy contract requirements - is foundational to any insurance compliance review. A vendor can carry an adequate aggregate limit while failing the per-occurrence requirement, and vice versa. Both must be checked.
Per occurrence is the maximum an insurer pays for any single event. Aggregate is the maximum paid for all claims during the entire policy period. Both must independently satisfy contract requirements.
- Caps a single event or incident
- Resets with each new occurrence
- Must meet contract's per-occurrence minimum
- A $1M event on a $1M limit = fully covered
- Caps all claims for the entire policy year
- Consumed by cumulative claims
- Resets only at policy renewal
- A $2M aggregate can be exhausted by multiple events
Per Occurrence Limit: What It Means
The per occurrence limit (sometimes called "each occurrence") is the maximum amount an insurer will pay for claims arising from any single occurrence. An "occurrence" in insurance terms is typically defined as a single event or a series of related events that result in bodily injury or property damage.
If a contractor's crew accidentally floods a building, causing $1.5 million in damage, and the contractor's general liability policy has a per occurrence limit of $1 million, the insurer pays $1 million. The remaining $500,000 is not covered by that policy. An umbrella or excess liability policy above the primary would need to respond for the remainder.
The per occurrence limit caps a single event. It does not matter how many victims, how many properties, or how many claims arise from that one occurrence - the insurer's total obligation is capped at the per-occurrence limit.
Aggregate Limit: What It Means
The aggregate limit (or "general aggregate") is the maximum amount the insurer will pay for all covered claims during the entire policy period - typically one year. Once the aggregate limit is consumed by claims, no further coverage is available from that policy for the remainder of the policy period, regardless of new incidents.
If a general liability policy has a $2 million general aggregate and claims in January consume $1.8 million, only $200,000 remains for the rest of the year. A new, unrelated incident in November would have only $200,000 of coverage available - even if the per-occurrence limit is $1 million.
The aggregate limit resets at each policy renewal.
Why Both Limits Must Be Verified
A contract might require $1,000,000 per occurrence and $2,000,000 aggregate. Both requirements must be satisfied independently:
- A policy with $1,000,000 per occurrence but only $1,000,000 aggregate fails the aggregate requirement
- A policy with $2,000,000 aggregate but only $500,000 per occurrence fails the per-occurrence requirement
- Only a policy with $1,000,000 per occurrence AND $2,000,000 aggregate satisfies both
This seems obvious, but in practice, reviewers sometimes accept a COI if one of the numbers matches the requirement - particularly when vendors submit amended limit structures that differ from the contract's specified format.
Products/Completed Operations Aggregate: A Third Limit to Watch
General liability policies carry a separate aggregate for products and completed operations claims. This aggregate runs independently of the general aggregate.
A policy with $2M general aggregate and $2M products/completed operations aggregate has total capacity of $4M across both buckets - but no more than $2M for any one category of claims.
Contracts in construction, manufacturing, and service industries often require adequate products/completed operations aggregate separately from the general aggregate. Both should be verified.
Per-Project Aggregates
Some contracts - particularly in construction - require that the general aggregate apply on a per-project basis rather than across the vendor's entire book of business. Without a per-project aggregate endorsement, the aggregate is shared across all of the vendor's projects during the policy year.
This matters because: if a vendor is working on ten projects and has a $2M aggregate, each project theoretically has access to $2M - but claims on one project reduce what is available for others. A per-project aggregate endorsement creates a fresh $2M for each individual project, protecting each client from claims on unrelated engagements.
When reviewing a COI for contracts that require per-project aggregates, look for the endorsement notation in the description of operations.
Occurrence vs. Claims-Made and Aggregate
In claims-made policies like professional liability, the aggregate limit applies to claims made during the policy period, not occurrences during the policy period. This distinction affects how aggregate erosion should be evaluated.
Reading Per Occurrence and Aggregate on a COI
On the ACORD 25, the commercial general liability section shows both limits in the limits column:
- Each occurrence - the per-occurrence limit
- General aggregate - the total aggregate limit
- Products/completed operations aggregate - separately listed
Compare each figure directly to the contract requirement. Do not accept a combined limit interpretation - each must independently satisfy the requirement.
How Bramble Helps
Bramble reads per-occurrence and aggregate limit requirements from your contracts and compares them against each corresponding limit on submitted COIs. Both limits are checked independently, and shortfalls on either dimension are flagged - eliminating the common error of accepting a COI because the aggregate looks right while the per-occurrence limit is below the contractual threshold.
Visit getbramble.com to see how Bramble handles contract-vs-COI compliance with precision.