Firearms Insurance Agent Blog

The Firearms Insurance Specialists

Aggregate vs. Per-Occurrence Limit

insurance claim paper with pen on top

As you’re shopping around for business insurance, there will be many factors for you to consider. Different plans will have different rates and coverages. They may even have different kinds of payment limits. Aggregate limits and per-occurrence limits are the two main types of payment limits you may see when shopping for business insurance. Here, we discuss they mean:

Aggregate Limit

If you have a policy with an aggregate limit, this refers to the payment limit your policy will pay for all your claims combined during one policy term. Let’s look at an example. Say your policy has an aggregate limit of $2,000,000. That $2,000,000 will cover all the claims during a single policy year, provided the claims all together cost no more than $2,000,000.

Per-Occurrence Limit

A per-occurrence limit is the maximum payment you would receive for a single claim. For most policies, you will have both aggregate and per-occurrence limits. Let’s look back that the example from the previous paragraph. You have a $2,000,000 aggregate limit for all your claims, combined, for the policy year. Meanwhile, you have a $1,000,000 per-occurrence limit. So, that means your policy will pay no more than $1,000,000 for each individual claim. If you have a claim that costs more than $1,000,000, your policy will only cover the $1,000,000 while the rest you must cover out-of-pocket. Then, you will have just $1,000,000 of coverage left for the rest of the policy year due to your $2,000,000 aggregate limit.

When you’re shopping for business insurance, it’s important to have the right insurance agent by your side. Contact Firearms Insurance Agent to learn more.