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Aggregate Product Liability Limit

Aggregate Product Liability Limit

What Is the Aggregate Product Liability Limit?

The aggregate product liability limit is the maximum payout a insurance company will make during the life or term of an insurance product. It is one of the six unique limits listed in a commercial general liability (CGL) insurance policy.

Understanding the Aggregate Product Liability Limit

The aggregate product liability limit assists insurers with limiting their exposure to risks with respect to a given CGL policy. In effect, it assists them with adjusting their risks. It is a set dollar amount on a property or liability policy that an insurance company won't be required to pay above. The amount stays unchanged, regardless of the number of claims are made per period, as long as neither the dollar amount nor time span has been surpassed. On the off chance that the term of a CGL is extended, the tenure of the aggregate product liability limit is likewise extended along with it.

This limit can be based either per occurrence, or for the life and term of the policy. When the limit is arrived at the insured can never again file claims against the policy, and any extra liability or repairs that are incurred should be made out of pocket by the insured. This prudently safeguards the insurance company from over the top or progressing losses. A umbrella policy can be utilized to cover costs once an aggregate limit is gone after an insurance policy. In any case, it is important to recall that umbrella policies additionally accompany aggregate limits.

The aggregate product liability limit may likewise be alluded to as an annual aggregate limit. It is unique in relation to the general aggregate limit, which is the most that an insurer will pay for hurt coming about because of substantial injury, property damage, and personal and advertising injury.

Illustration of an Aggregate Product Liability Limit

For instance, a homeowner has purchased a home in a hurricane-inclined area. The insurance company has set an aggregate product liability limit at $250,000 in claims each year, or $500,000 over the life of the policy.

During an especially terrible hurricane season, the property supports $350,000 in damages. The insured files a claim with their homeowners insurance company and gets a payment to cover $250,000 worth of damages, passing on the homeowner to think of the extra $100,000. This has met the policy's liability limit for the year. On the off chance that the homeowner causes any extra damages or losses during the policy year, they should pay for them personal also.

Presently say the next year the property is struck again by loss, and encounters an electrical fire, causing an extra $100,000 in damages. In the event that the policy year has passed, the homeowner can now present a claim for the new damages, getting the full $100,000. In any case, their excess limit on life of policy claims has drawn nearer to the maximum, leaving them with just $150,000 for any future losses they might support, regardless of what the idea of the claim.

At such time they will be confronted with concluding what will be their best option moving forward. They might conclude that it is best to find another homeowners insurance company, which will be [required by the lender](/constrained place-insurance) on the off chance that they actually hold a mortgage on the property, one that conveys a higher product liability limit. Or on the other hand they might opt to guarantee that they have an adequate number of funds accessible to cover any future claims.

These limits don't just apply to homeowners insurance policies, and can be found on a wide range of guaranteeing platforms.


  • The aggregate product liability sets a limit on the payouts for an insurance policy.
  • An umbrella policy whose limit has not been reached can be utilized to cover costs once an aggregate limit for an overall insurance policy is reached.
  • It assists insurers with limiting their risk exposure to the given policy.