Liability · Insurance Term
Aggregate Limit (Annual Aggregate)
Definition
An aggregate limit is the most an insurance policy will pay for all covered claims combined during the policy period, usually one year. Once it is used up, the policy pays nothing more for that period, even if each claim was under the per-claim limit.
In Plain English
Liability policies usually have two kinds of limits. The each occurrence limit caps what the policy pays for any one incident. The aggregate caps the total for the whole policy year. A common pairing on commercial general liability is $1 million per occurrence and $2 million aggregate.
A standard CGL policy usually has a general aggregate limit plus a separate aggregate for products-completed operations. Owners with many buildings often ask for a per location aggregate, so a bad year at one property cannot drain the limit for all the others.
Defense costs on many CGL policies are paid in addition to limits, but on some policies they reduce the limit. Check how your policy treats defense costs, because that affects how quickly an aggregate can be used up.
Not sure how your policy handles this? Have us review it, or get a quote.
Example
Hypothetical: an owner has a $1 million per occurrence, $2 million aggregate policy covering six apartment complexes. Three lawsuits settle that year for $800,000 each, totaling $2.4 million. The first two use $1.6 million; the third can collect only the remaining $400,000, leaving the owner exposed for $400,000 unless an umbrella responds.
What to Watch For
- Ask whether your aggregate applies per location or across all properties.
- Check whether defense costs are inside or outside the limits.
- Make sure your umbrella or excess policy drops down if the underlying aggregate is exhausted.
- Review lease and loan requirements; many specify per-location aggregates.
Common Questions
Does my aggregate limit reset every year?
Usually yes, at each annual renewal. Multi-year policies or project policies may have a single aggregate for the whole term, so check the declarations.
What is a good aggregate for a multi-property owner?
It depends on the number of properties, their exposures and contract requirements. A per-location aggregate plus an umbrella is a common structure; your agent can model scenarios with you.
Last updated October 14, 2026 · Primesure editorial team · How We Write