11.1 CGL Limits of Insurance and Aggregates
Key Takeaways
- The CGL Declarations list six limits; standard amounts are $1M occurrence, $2M general aggregate, $2M PCOH aggregate, $1M P&AI, $100K damage to premises rented, $5K med-pay per person.
- One occurrence equals one Each Occurrence limit regardless of how many people are injured or how many suits are filed.
- Premises, Coverage B, and Coverage C claims erode the General Aggregate; products and completed-operations claims erode the separate PCOH aggregate.
- Defense costs are supplementary payments and erode no limit; the General Aggregate can be exhausted mid-term.
- CG 25 03 (Per Project) and CG 25 04 (Per Location) endorsements multiply aggregate protection so one loss does not drain the others.
The Six Limits on the CGL Declarations
The standard ISO Commercial General Liability policy (CG 00 01 04 13 occurrence form) prints six distinct limits on its Declarations page. The exam tests how these six limits interact far more than it tests their dollar values, so memorize both the standard amounts and which claims erode which pool.
| Limit | Standard amount | What it caps |
|---|---|---|
| General Aggregate | $2,000,000 | Total for premises-ops (Cov A), Cov B, and Cov C in the period |
| Products-Completed Operations (PCOH) Aggregate | $2,000,000 | Total for products/completed-operations claims (separate pool) |
| Personal & Advertising Injury | $1,000,000 | Most per one person/organization (Coverage B) |
| Each Occurrence | $1,000,000 | Most for BI + PD from a single occurrence (Coverage A) |
| Damage to Premises Rented to You | $100,000 | Fire/short-term-rental damage to space the insured rents |
| Medical Expense | $5,000 | Per person (Coverage C, no-fault) |
The Each Occurrence limit feeds into the two aggregates; the aggregates are the ceiling on everything the insurer pays during the policy term.
How the Each-Occurrence Limit Works
The Each Occurrence limit is the most the insurer pays for all bodily injury and property damage arising out of one occurrence, regardless of the number of persons injured, the number of claims or suits brought, or the number of insureds involved. One occurrence equals one limit, no matter how many victims.
Worked example. A single warehouse fire produces $500,000 of third-party property damage and $750,000 of bodily injury, totaling $1,250,000 from one occurrence. With a $1,000,000 Each Occurrence limit, the insurer pays exactly $1,000,000. The remaining $250,000 is uninsured, and because the occurrence limit caps the loss, the four separate lawsuits the victims file do not each get their own limit.
Trap. Candidates wrongly multiply the limit by the number of claimants. Four injured customers from one explosion still share a single Each Occurrence limit.
Which Aggregate Does a Claim Erode?
This is the single most useful table in the limits topic. Every premises, Coverage B, and Coverage C claim chips away at the General Aggregate; products and completed-operations claims chip away at the separate PCOH Aggregate.
| Claim type | Counts against Each Occurrence? | General Aggregate? | PCOH Aggregate? |
|---|---|---|---|
| Slip-and-fall (premises) | Yes | Yes | No |
| Defective-product injury | Yes | No | Yes |
| Completed-operations injury | Yes | No | Yes |
| Libel/slander (Coverage B) | P&AI limit | Yes | No |
| Medical payments (Coverage C) | $5,000/person | Yes | No |
| Fire to rented premises | Separate $100K | No | No |
Why a separate PCOH pool? Product recalls and latent defects can generate catastrophic, delayed losses; isolating them in their own $2,000,000 pool protects the premises-operations limits a business relies on for everyday claims. Note that defense costs are supplementary payments and erode NO limit at all.
How the Six Limits Interact
The CGL declarations show six limits, and the exam tests how a single occurrence draws against them in order:
| Limit | What it caps |
|---|---|
| General Aggregate | Most the policy pays in the period for all BI/PD, Coverage B, and Coverage C except products-completed operations |
| Products-Completed Operations Aggregate | Separate annual cap for product/completed-work claims |
| Personal & Advertising Injury | Per person/organization (within the general aggregate) |
| Each Occurrence | Most for any one occurrence (BI + PD combined) |
| Damage to Premises Rented to You | Fire (and limited) damage to rented premises, often $100,000 |
| Medical Expense | Per-person Coverage C sublimit, often $5,000 |
Worked Aggregate Scenario
A contractor with a $1,000,000 each-occurrence / $2,000,000 general aggregate / $2,000,000 products-completed aggregate policy has three on-premises slip-and-fall claims of $900,000, $800,000, and $700,000 in one year. The first two ($1.7M) draw against the general aggregate, leaving $300,000; the third $700,000 claim is paid only to the remaining $300,000 general aggregate — the insured owes the $400,000 gap.
A separate $1,200,000 product injury that same year draws against the untouched products-completed aggregate, which is why ISO keeps two aggregates. The exam uses multi-claim years to test whether candidates track each aggregate separately and stop paying when one is exhausted.
A retail store with a $1,000,000 Each Occurrence and $2,000,000 General Aggregate suffers three separate covered slip-and-fall judgments of $800,000 each in one policy year. How much does the CGL pay in total, and what happens to the PCOH aggregate?
Per-Project and Per-Location Aggregate Endorsements
A single shared General Aggregate is dangerous for contractors and multi-site businesses: one bad project or location can drain the protection meant for all the others. Two ISO endorsements multiply the aggregate so each project or premises gets its own pool.
- CG 25 03 - Per Project Aggregate: a separate General Aggregate applies to each construction project.
- CG 25 04 - Per Location Aggregate: a separate General Aggregate applies to each described premises.
These are frequent exam topics for contractor and real-estate scenarios. If a contractor has five active projects under a CG 25 03 endorsement with a $2,000,000 General Aggregate, the insurer can pay up to $2,000,000 per project - effectively $10,000,000 of aggregate protection across the five sites.
How the General Aggregate Can Be Exhausted Mid-Term
A point candidates miss: the General Aggregate is the total the insurer pays for all eligible premises, Coverage B, and Coverage C claims during the policy period, and it can be used up before the policy expires. Once exhausted, no further such claims are paid until renewal, even though the policy is technically still in force.
Common limit packages the exam may reference:
| Package | Each Occurrence | General Aggregate | PCOH Aggregate |
|---|---|---|---|
| Minimum | $300,000 | $600,000 | $600,000 |
| Standard | $1,000,000 | $2,000,000 | $2,000,000 |
| Enhanced | $2,000,000 | $4,000,000 | $4,000,000 |
| High | $5,000,000 | $10,000,000 | $10,000,000 |
Notice the General Aggregate is typically twice the Each Occurrence limit on the standard package - a number the exam expects you to recall on sight.
A general contractor wants assurance that a large loss on one job site will not consume the aggregate protecting its other active projects. Which ISO endorsement directly addresses this?