11.1 CGL Limits of Insurance and Aggregates
Key Takeaways
- The CGL (CG 00 01) has six distinct limits, including two annual aggregates that do not restore mid-term.
- The Each Occurrence limit caps any single event, but the General Aggregate is the hard annual ceiling for all non-products losses.
- Products-completed operations losses erode a separate aggregate, preserving capacity for premises/operations claims.
- Medical Payments (Coverage C) shares the Each Occurrence limit and erodes the General Aggregate; it has no separate aggregate.
- Damage to Premises Rented to You defaults to $300,000 and is a sublimit within the Each Occurrence limit.
How the CGL Limits Section Works
The Commercial General Liability Coverage Form (ISO CG 00 01, current edition CG 00 01 04 13) does not use a single policy limit. Instead, Section III - Limits of Insurance establishes six separate limits that interact in a defined order. Producers must know each limit, which coverage it caps, and how the two aggregates restore (or fail to restore) over the policy period. Exam questions almost always test the interplay between the per-occurrence limit and the aggregates, not a single number in isolation.
The declarations page shows these limits. The standard CGL is written on an occurrence basis unless a claims-made form (CG 00 02) is selected, which changes the trigger but not the limit structure covered here.
The Six CGL Limits
| Limit | What it caps | Resets? |
|---|---|---|
| General Aggregate | Most the insurer pays for all damages under Coverage A (except products-completed ops), Coverage B, and Coverage C combined | Annually |
| Products-Completed Operations Aggregate | All Coverage A bodily injury/property damage arising from the products-completed operations hazard | Annually |
| Personal and Advertising Injury Limit | Most paid for Coverage B per person/organization | Per person/org; capped by General Aggregate |
| Each Occurrence Limit | Most paid for Coverage A + Coverage C combined for any one occurrence | Per occurrence; capped by aggregates |
| Damage to Premises Rented to You | Most paid for property damage to one premises rented to or temporarily occupied by you | Per premises |
| Medical Expense (Coverage C) | Most paid for medical expenses for any one person | Per person |
The Damage to Premises Rented to You limit (formerly "Fire Legal Liability") defaults to $300,000 in the CG 00 01 04 13 edition and applies to fire, plus other perils if rented 7 or fewer consecutive days.
How the Aggregates Cap Everything
The Each Occurrence limit is the gatekeeper for any single loss event, but every payment also erodes one of the two aggregates:
- Coverage A (non-products) losses, all Coverage B, and all Coverage C erode the General Aggregate.
- Coverage A losses inside the products-completed operations hazard erode the separate Products-Completed Operations Aggregate.
Once an aggregate is exhausted, the insurer pays nothing further in that category for the rest of the policy term, even if individual occurrences still have room under the Each Occurrence limit. The aggregates do not restore mid-term; they reset only when the policy renews.
Worked Numeric: Stacking Limits Against the General Aggregate
A contractor carries: Each Occurrence $1,000,000 / General Aggregate $2,000,000 / Products-Completed Ops Aggregate $2,000,000.
During the year, three premises (non-products) liability occurrences hit the policy:
- Occurrence 1: $1,000,000 (paid in full - at Each Occurrence limit)
- Occurrence 2: $1,000,000 (paid in full - General Aggregate now $2,000,000 used)
- Occurrence 3: $600,000 (the General Aggregate is exhausted - insurer pays $0)
Total paid: $2,000,000, not $2,600,000. The Each Occurrence limit had room for occurrence 3, but the General Aggregate is the hard ceiling. A separate products-completed operations claim that same year would still draw on its own untouched $2,000,000 aggregate.
A CGL policy has Each Occurrence $1,000,000 and General Aggregate $2,000,000. Two unrelated premises-liability occurrences each settle for $1,000,000. A third non-products occurrence then settles for $500,000. How much does the insurer pay on the third occurrence?
Trap: Medical Payments and the Aggregate
A common exam trap: candidates assume Coverage C - Medical Payments has its own aggregate. It does not. Med Pay (a no-fault, good-will coverage requiring no proof of negligence) shares the Each Occurrence limit with Coverage A and erodes the General Aggregate. Likewise, the Damage to Premises Rented to You limit is a sublimit within the Each Occurrence limit, not a separate pool stacked on top of it. Knowing what sits inside a larger limit versus beside it is the single most tested limits concept on the casualty portion.
Supplementary Payments Are Outside the Limits
A point candidates frequently miss: the CGL's Supplementary Payments provision pays certain costs in addition to the Limits of Insurance. These include all defense costs, the cost of bonds to release attachments (up to the Each Occurrence limit), up to $250 per day for the insured's lost earnings while assisting the defense, court costs taxed against the insured, and prejudgment and post-judgment interest.
Because defense is paid outside the limit, a $1,000,000 Each Occurrence policy that spends $200,000 defending a claim still has the full $1,000,000 available to pay the judgment. This is a defining feature of the standard CGL versus many professional liability forms, where defense costs erode ("cannibalize") the limit. Exam scenarios often contrast these two structures - read carefully whether defense is "inside" or "outside" the limits.
Restoring the Aggregate at Renewal
When a policy renews, both aggregates reset to their full annual amount for the new term. An occurrence that spans two policy periods (continuous or repeated exposure) can complicate which year's aggregate responds, but for first-pass exam purposes treat each annual term as a fresh set of aggregates.
If a single occurrence triggers multiple policy years, the standard CGL's anti-stacking language and "deemed to occur" provisions assign the loss to one occurrence - it does not multiply the Each Occurrence limit across years. The practical takeaway: more limit is bought through higher per-occurrence limits, separate project aggregates, or an umbrella - not by relying on aggregate renewal.