11.1 CGL Limits of Insurance and Aggregates
Key Takeaways
- The CGL has six limits: General Aggregate, Products-Completed Operations Aggregate, Personal & Advertising Injury, Each Occurrence, Damage to Premises Rented to You (~$100,000), and Medical Expense (~$5,000/person).
- The General Aggregate caps Coverage A premises-operations, Coverage B, and Coverage C — but NOT products-completed operations, which has its own separate aggregate.
- The Each Occurrence limit is the most paid for one occurrence regardless of the number of claimants, claims, or insureds.
- Standard limits are $1M Each Occurrence with $2M General and $2M Products-Completed Operations aggregates.
- Damage to Premises Rented to You and Medical Expense are sub-limits inside, not additional to, the Each Occurrence limit.
The Six Limits of the ISO CGL
The Commercial General Liability Coverage Form (ISO CG 00 01, the standard occurrence form) declares six distinct Limits of Insurance. Exam questions almost always probe how a single dollar figure on the Declarations interacts with the two aggregate caps. Commit the structure below to memory because the test will give you a loss scenario and ask which limit responds and how much aggregate remains.
| Limit (CG 00 01) | Typical amount | What it caps |
|---|---|---|
| General Aggregate | $2,000,000 | Total for premises/operations (Cov A) + Cov B + Cov C combined |
| Products-Completed Operations Aggregate | $2,000,000 | All bodily injury/property damage in the products-completed operations hazard |
| Personal & Advertising Injury | $1,000,000 | Each person/organization (Coverage B) |
| Each Occurrence | $1,000,000 | Most paid for any one occurrence (Cov A + Cov C combined) |
| Damage to Premises Rented to You | $100,000 | Fire/other specified perils to rented premises |
| Medical Expense | $5,000 | Per person, regardless of fault (Coverage C) |
How the two aggregates partition losses
The single most-tested distinction: the General Aggregate caps premises-operations (Coverage A), Personal & Advertising Injury (Coverage B), and Medical Payments (Coverage C). It does NOT cap products-completed operations losses. Those erode a separate Products-Completed Operations Aggregate.
This matters because a manufacturer or contractor can exhaust one aggregate while the other stays fully intact. A claim from a customer who slips in the showroom erodes the General Aggregate; a claim from a defective product injuring a user away from the premises erodes the Products-Completed Operations Aggregate. Mixing them up is the classic trap.
Worked numeric: aggregate erosion
A contractor carries standard limits: $1M Each Occurrence, $2M General Aggregate, $2M Products-Completed Operations Aggregate.
- Q1 – Premises slip-and-fall (Cov A): insurer pays $700,000. General Aggregate remaining = $2,000,000 − $700,000 = $1,300,000. Products aggregate untouched at $2,000,000.
- Q2 – Showroom fire injuring a visitor (Cov A): pays $600,000. General Aggregate now $1,300,000 − $600,000 = $700,000.
- Q3 – Defective installed product injures a homeowner after the job is complete (products-completed operations): pays $1,000,000 (capped by Each Occurrence). This erodes the Products aggregate to $2,000,000 − $1,000,000 = $1,000,000; the General Aggregate stays at $700,000.
Note the Each Occurrence limit caps any single loss at $1,000,000 even though $1,300,000 of General Aggregate was theoretically available for Q1; only $700,000 was actually paid because that was the loss, but had the loss been $1.4M the payment would be capped at $1,000,000.
A manufacturer's CGL has a $2,000,000 General Aggregate and a $2,000,000 Products-Completed Operations Aggregate. During the policy year, premises-operations claims have already paid $2,000,000. A customer is then injured by a defective product used at home. How is the product claim treated?
Each Occurrence vs. number of claimants
The Each Occurrence limit is the most the insurer pays for bodily injury and property damage arising out of any one occurrence — regardless of the number of insureds, claims made, persons injured, or vehicles involved. If a single explosion injures fifty people, the $1,000,000 Each Occurrence limit is the combined cap for all fifty (subject to the aggregate), not $1,000,000 per claimant. This is the reverse of split auto limits, where a per-person cap applies first. Watch for scenario questions that try to multiply the limit by the number of victims.
Sub-limits that sit inside the structure
Damage to Premises Rented to You (default ~$100,000) covers fire — and, since the 2013 ISO revision, other specified perils for premises rented to or temporarily occupied by the insured for 7 or fewer days. It is a sub-limit of the Each Occurrence limit, not additional to it.
Medical Expense (Coverage C, ~$5,000 per person) pays reasonable medical costs without regard to fault for injuries on premises or arising from operations, if expenses are incurred and reported within one year of the accident date. Coverage C payments erode the Each Occurrence limit and the General Aggregate.
How the Limits Stack in a Claim
Walk a claim through the structure in order: first decide which coverage applies (A for premises/operations BI-PD, B for the offense list, C for no-fault medical); then apply the relevant per-occurrence or per-person limit; then erode the correct aggregate.
A single occurrence cannot pay more than the Each Occurrence limit no matter how many claimants share it, and once the applicable aggregate is exhausted the policy stops paying even though the per-occurrence limit looks available on a fresh claim. The two aggregates run independently, so a products manufacturer can burn through its Products-Completed Operations Aggregate while its General Aggregate stays full, and vice versa.
Aggregate Reinstatement and Project Limits
Standard aggregates do not reinstate during the policy term - once gone, they are gone until renewal. This is why contractors with many simultaneous jobs buy the Per Project or Per Location aggregate endorsement, which gives each project or site its own General Aggregate so one catastrophic claim cannot strip coverage from every other job. Knowing that the base form provides a single shared General Aggregate - and that the endorsement multiplies it by project - explains a frequent construction-account exam scenario.
Why the Damage-to-Premises Sublimit Exists
The Damage to Premises Rented to You limit is a narrow carve-back to the property-damage exclusions: it restores coverage for fire damage (and, since 2013, other specified perils for short-term rentals of seven days or fewer) to premises the insured rents or temporarily occupies. Because it is a sublimit of - not in addition to - the Each Occurrence limit, a large fire to rented premises is capped at that smaller figure even though the full occurrence limit exists. Candidates who treat it as extra coverage on top of the occurrence limit get the dollar answer wrong.
Under the standard CGL, the Each Occurrence limit applies to a single occurrence: