11.1 CGL Limits of Insurance and Aggregates

The Six-Limit Structure

The Commercial General Liability (CGL) form published by Insurance Services Office (ISO) — current edition CG 00 01 04 13 — does not use a single limit. It stacks six separate limits of insurance, and exam writers love to ask which payment counts against which limit.

The six limits are: General Aggregate Limit, Products-Completed Operations Aggregate Limit, Personal and Advertising Injury Limit, Each Occurrence Limit, Damage to Premises Rented to You Limit (about $100,000), and Medical Expense Limit (about $5,000 per person).

Reading them as one pool is the classic trap. Each limit caps a different category of loss, and exhausting one does not unlock another.

What Erodes the General Aggregate

The General Aggregate Limit is the most the insurer will pay during the policy period for all of the following combined: premises and operations liability under Coverage A, all Coverage B Personal and Advertising Injury, and all Coverage C Medical Payments.

It does not include products-completed operations losses — those erode their own separate aggregate.

When the General Aggregate is used up, the insurer pays nothing more for those categories even if the Each Occurrence limit is untouched.

Each Occurrence and the Products Aggregate

The Each Occurrence Limit is the most paid for bodily injury (BI) and property damage (PD) arising from any one occurrence, regardless of how many claimants, claims, or insureds are involved. Within one occurrence it also caps Coverage C medical payments and the rented-premises damage limit.

The Products-Completed Operations Aggregate is a wholly separate cap for injury or damage from the insured's products or completed work away from its premises. A contractor whose finished deck collapses months later triggers this aggregate, not the General Aggregate.

Standard limits are commonly $1,000,000 Each Occurrence, $2,000,000 General Aggregate, and $2,000,000 Products-Completed Operations Aggregate.

Worked Limit Example

A warehouse explosion injures four customers in a single event. The four lawsuits total $1,400,000 in bodily injury. The policy carries a $1,000,000 Each Occurrence limit and a $2,000,000 General Aggregate.

Because all four injuries arise from one occurrence, the Each Occurrence limit caps the payout at $1,000,000 — the number of claimants does not increase it. The insurer pays $1,000,000 and the insured is exposed for the remaining $400,000.

That $1,000,000 also reduces the remaining General Aggregate to $1,000,000 for the rest of the policy period.

Sublimits: Rented Premises and Med-Pay

Two of the six limits are small sublimits carved out of the larger structure. The Damage to Premises Rented to You Limit (default about $100,000) covers fire — and, in the 2013 edition, certain other perils — to premises the insured rents or temporarily occupies. It is the one narrow exception to the damage-to-property-in-your-care concept.

The Medical Expense Limit (Coverage C) is roughly $5,000 per person and pays small medical bills regardless of fault, on a goodwill basis, to keep minor injuries from becoming lawsuits.

Watch the wording: the rented-premises limit is per premises, while med-pay is per person.

How Aggregates Restore — and How They Don't

A key exam concept: aggregates do not refill mid-term. Once the General Aggregate of $2,000,000 is paid out, premises-operations, Coverage B, and Coverage C losses stop being covered until renewal, even if Each Occurrence limits are intact.

The two aggregates are independent. Exhausting the General Aggregate does not touch the Products-Completed Operations Aggregate, and vice versa. A manufacturer can blow through its products aggregate on recalls while its General Aggregate stays full for store slip-and-falls.

At renewal, both aggregates reset to their full amounts for the new policy period.

Personal and Advertising Injury Limit

The Personal and Advertising Injury Limit under Coverage B is the most paid for all such offenses to any one person or organization. It covers offenses like libel, slander, false arrest, malicious prosecution, wrongful eviction, and use of another's advertising idea.

Unlike Coverage A, Coverage B is not triggered by an occurrence — it responds to offenses, so there is no Each Occurrence limit for it. All Coverage B payments still erode the General Aggregate.

Exam trap: candidates wrongly apply the Each Occurrence limit to a libel claim. Coverage B has its own per-person/organization limit and feeds the General Aggregate.

Reading the Declarations

When a question hands you a CGL declarations page, map each number to its bucket before answering. A typical schedule reads:

First classify the loss (premises-operations, completed work, Coverage B offense, med-pay, rented-premises fire), then apply the matching per-loss limit, then check whether the relevant aggregate has room left.

The Six CGL Limits and What Each Caps

The critical relationship is that the general aggregate and the products-completed-operations aggregate are separate buckets: exhausting one does not reduce the other. So a contractor who burns through the general aggregate on premises slips-and-falls still has the full completed-operations aggregate available for a defective-work injury that surfaces later.

Worked Multi-Claim Year

Assume $1,000,000 each occurrence, $2,000,000 general aggregate, and $2,000,000 products-completed-ops aggregate. During the year the insured has three premises-operations losses of $800,000, $900,000, and $700,000, plus one completed-operations claim of $1,200,000.

• Premises losses 1 and 2 pay in full ($1,700,000), exhausting most of the general aggregate.
• Premises loss 3 is capped by the remaining general aggregate: only $300,000 is left, so $400,000 is uncovered.
• The completed-operations claim draws on its own $2,000,000 aggregate and pays the full $1,200,000, unaffected by the depleted general aggregate.

Exam Tip: Classify the loss first, then apply the per-occurrence (or per-offense) limit, then check the matching aggregate. Products-completed-operations has a separate aggregate that the general-aggregate losses cannot erode.