What Are Policy Limits?

The two limits you will see most

A per-occurrence limit is the most an insurer will pay for any single claim. An aggregate limit is the most it will pay in total during the policy period. A certificate showing $1M per occurrence and $2M aggregate means one claim is covered up to $1M, but once $2M in total claims is reached, the policy stops responding.

Reaching higher limits

When a contract requires a high limit like $5M, a partner often meets it by stacking an umbrella or excess policy on top of a primary one. Read both together toconfirm the combined limit actually reaches your requirement.

Why it matters for compliance

Setting and checking limits is how you make sure a partner's coverage is sized to the work they do for you. A limit that looks fine in isolation may be far too low for the exposure involved.

Related resource
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A depleted aggregate is a hidden risk. See how general aggregate limits can catch you off guard.