CGL Limits of Insurance & Aggregates

How CGL Limits Work

The CGL uses a structure of limits that the exam tests because a single claim interacts with several caps. Understanding which limit a given payment erodes, and how aggregates reset, is essential to predicting how much coverage remains.

The Two Aggregates

The CGL has two separate annual aggregates. The General Aggregate is the most the insurer pays for the sum of damages under Coverage A (except products-completed operations), Coverage B, and Coverage C medical expense during the policy period. The Products-Completed Operations Aggregate is a separate annual cap for all bodily injury and property damage arising from the products-completed operations hazard. Keeping these separate means that exhausting one does not deplete the other, an important protection the exam tests.

Each-Occurrence and Sublimits

The Each Occurrence limit caps the total of Coverage A bodily injury and property damage plus Coverage C medical payments arising from any single occurrence, and each occurrence payment also erodes the applicable aggregate. Within that structure sit two notable sublimits: Damage to Premises Rented to You caps the insured's liability for fire (and limited other) damage to premises the insured rents (a tenant's liability for burning the landlord's building), and the Medical Expense limit caps Coverage C per person.

The Personal and Advertising Injury limit caps Coverage B per person or organization and erodes the General Aggregate.

Worked Aggregate Example

Suppose a CGL has a $1,000,000 each-occurrence limit, a $2,000,000 general aggregate, and a $2,000,000 products-completed operations aggregate. During the year, premises-and-operations claims pay $1,500,000, eroding the general aggregate to $500,000 remaining; a later premises claim of $700,000 would be paid only up to the $500,000 left in the general aggregate. Meanwhile, a products claim of $900,000 is paid in full because it draws on the separate products-completed operations aggregate, leaving $1,100,000 there.

This independence of the two aggregates is exactly what the exam tests when it asks how much remains after a series of claims.

Reading a Limits Question

To answer a CGL limits question, classify each claim as premises-and-operations or products-completed-operations, apply the each-occurrence cap to the individual loss, then subtract from the correct aggregate, remembering that products-completed operations draws on its own aggregate. Watch for the Damage to Premises Rented to You sublimit on a tenant's fire-damage claim and the Medical Expense per-person cap on a Coverage C payment.

This methodical tracking, occurrence cap first, then the proper aggregate, with attention to the two sublimits, lets you determine remaining coverage accurately, which is the precise skill the exam rewards in the CGL limits section.

Tracking Coverage Through the Aggregates

CGL limit questions require tracking a series of claims through the each-occurrence limit and the two separate aggregates. The each-occurrence limit caps Coverage A bodily injury and property damage plus Coverage C medical payments from a single occurrence. The general aggregate caps the annual total for everything except products-completed operations, while the products-completed operations aggregate is a separate annual cap. Crucially, exhausting one aggregate does not deplete the other.

A worked case: with a $1,000,000 each-occurrence limit, a $2,000,000 general aggregate, and a $2,000,000 products aggregate, premises claims totaling $2,000,000 exhaust the general aggregate; a new premises claim then has nothing left, but a $900,000 products claim is paid in full from the untouched products aggregate.

Two sublimits sit within the structure. Damage to Premises Rented to You caps a tenant insured's liability for fire (and limited other) damage to premises it rents from a landlord, and the Medical Expense limit caps Coverage C per person. To find remaining coverage, classify each claim as premises-and-operations or products-completed-operations, apply the each-occurrence cap to the individual loss, then subtract from the correct aggregate, watching for the two sublimits.

This methodical tracking, occurrence cap first, then the proper aggregate, is precisely the skill the exam rewards in the limits section.

Track CGL claims through the each-occurrence limit and the two separate annual aggregates: the general aggregate (everything except products-completed operations) and the products-completed operations aggregate. Exhausting one does not deplete the other, so a products claim is paid from its own aggregate even after premises claims have used the general aggregate. Watch the two sublimits, Damage to Premises Rented to You (a tenant's fire-damage liability) and the per-person Medical Expense limit.

To find remaining coverage, classify the claim, apply the each-occurrence cap, then subtract from the correct aggregate.