What Does Insurance Per Project Aggregate Mean?
Commercial general liability insurance policies all have a limit of liability which is the most the policy will pay on behalf of its insured. A per project aggregate limit extends the limit to apply separately to each insured construction project.
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Per Occurrence Limit
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The most a commercial general liability pays per claim is known as the per occurrence limit. This limit applies regardless of the number of individual claims arising out of any one occurrence.
General Aggregate Limit
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Subject to the per occurrence limit, the most the policy will pay in total is known as the general aggregate limit. In many instances, the general aggregate will either be the same as the per occurrence limit or double the per occurrence limit.
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Per Project Aggregate
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When insuring construction activity, it is possible to secure a separate aggregate limit to apply to each construction project. This will extend the total available limits of coverage. However, it will not increase the per occurrence limit.
Advantages
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The per project aggregate is important for contractors who work on multiple projects. Instead of purchasing separate policies, it is more cost effective to dedicate limits to each project as necessary.
Disadvantages
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Use of the per project aggregate may lull contractors into a false sense of security as it does not increase the per occurrence limit nor does it increase the completed operations limit.
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References
Resources
- Photo Credit construction image by Pali A from Fotolia.com
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Comments
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Commercial insurance does not always have an aggregate. It depends on the policy written. ISO policies (the most commonly used) typically will have an aggregate. However a Unicover policy does not have an aggregate.
