General Aggregate
The maximum amount an insurance company will pay for all covered claims during a policy period, typically one year. It represents the total limit across all incidents and claim types covered under the policy.
Example
“The restaurant's general liability policy had a $2 million general aggregate limit, meaning the insurer would pay no more than $2 million total for all claims during the policy year.”
Memory Tip
Think of aggregate like a bucket - once all your claims fill the bucket to the 'General' limit, there's no more coverage left for that year.
Why It Matters
Understanding your general aggregate helps you assess whether your insurance limits are adequate for your risk exposure. Businesses with multiple claims or high-risk operations may exhaust their aggregate limit before the policy year ends, leaving them unprotected.
Common Misconception
People often confuse the per-occurrence limit with the general aggregate, thinking they have the full per-occurrence amount available for each claim throughout the year. Once the general aggregate is exhausted by previous claims, no further coverage exists regardless of the per-occurrence limit.
In Practice
A contractor has a $1 million per-occurrence limit and $2 million general aggregate. They have three separate incidents: $800,000, $600,000, and $700,000 in claims. The first two claims are paid in full ($1.4 million total), but the third claim is only covered up to $600,000 because that exhausts the $2 million general aggregate, leaving the contractor responsible for the remaining $100,000.
Etymology
From Latin 'aggregatus,' meaning 'collected together.' In insurance, it refers to the collection of all possible claims under one policy limit, developing alongside modern commercial insurance in the early 1900s.
Common Misspellings
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