insurance

General Aggregate

The maximum amount an insurance company will pay for all covered claims during a policy period, typically one year. This is the total cap across all incidents and claim types covered under the policy.

Example

“The restaurant's liability policy had a $2 million general aggregate limit, meaning the insurer would pay no more than that total amount for all claims during the year.”

Memory Tip

Think 'General = All' and 'Aggregate = Add up' - it's the sum total of ALL claims for the year.

Why It Matters

The general aggregate protects insurance companies from unlimited exposure while helping policyholders understand their maximum coverage. If multiple claims exhaust this limit, you're personally responsible for any additional costs, making it crucial to select adequate limits.

Common Misconception

People often confuse per-occurrence limits with aggregate limits, thinking they can file unlimited claims up to the per-occurrence amount. In reality, once the general aggregate is reached through multiple claims, coverage stops regardless of individual claim limits.

In Practice

A contractor has $1 million per occurrence and $2 million general aggregate limits. They have three separate accidents: $800,000, $600,000, and $900,000 in damages. The insurer pays $800,000 and $600,000 for the first two claims (totaling $1.4 million), but only $600,000 of the third claim because that reaches the $2 million aggregate limit. The contractor pays the remaining $300,000 personally.

Etymology

From Latin 'aggregatus' meaning 'added together,' combined with 'general' to indicate the overall total limit across all coverage areas within a policy.

Common Misspellings

general aggrgategeneral agreggategenreal aggregategeneral aggreate

Related Terms

Per Occurrence Limit umbrella insurance

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