The liability limit refers to the maximum amount of money your insurer is required to pay if something bad happens to you, your things, or your property. You should understand the limits of liability of a homeowners policy before you buy it, as they tell you if you have enough insurance. Aggregate limits are part of commercial general liability (CGL) and professional liability insurance policies. That may not be enough for expensive items, so you may need a scheduled endorsement for personal property or an additional insurance policy.
So, if you're insuring a company with multiple employees, it might make sense to add additional supplemental coverage. The contracts of commercial general liability insurers (CGL) and professional general liability insurers cite these general aggregate limits in detail. The general aggregate limit sets a limit on the insurer's obligation to pay for property damage, bodily injury, medical expenses, lawsuits, etc., that may arise during the life of the insurance policy. For example, the liability limit for your home coverage is the amount that your insurance company considers necessary to rebuild your home based on location and construction costs.
The overall total limit is detailed in the insurance contract and limits the amount of covered losses that the insurer will pay for. In this way, although liability insurance protects the insured, it gives them an incentive to avoid being sued, since their coverage has limits. Once you reach your policy limits on a claim, your insurance company will have met its liability and will pay nothing more. Aggregate general limit liability refers to the largest amount of money that an insurer may be required to pay to an insured party during a specified period.
The statements page of your insurance policy lists the six coverages with your insurer's limits of liability next to them. Not only do insurance policies limit how much you'll pay for a single incident, but the total liability limit is the limit for the entire term of the policy, which is usually one year. If you have a million-dollar home, you could lose it in a lawsuit if your insurance coverage is insufficient. You can generally request an increase or decrease in your liability limits at any time during the policy period.
Liability limits are the maximum dollar amount of damages (“compensation”) that an insurance company will pay on your behalf.