Per Claim vs Aggregate Limit

Your general liability insurance policy with limits of $1,000,000/$3,000,000 consists of two components: the per claim limit and the aggregate limit.

1. Per Claim Limit ($1,000,000): This is the maximum amount the insurance company will pay for a single claim. It represents the upper limit of coverage for damages arising from one incident or occurrence. If a claim is made against your policy and the awarded damages (plus legal fees and other covered expenses) do not exceed $1,000,000, your policy will cover it up to this limit. If the costs exceed this amount, you would be responsible for the difference.

2. Aggregate Limit ($3,000,000): This is the total amount the insurance company will pay for all claims during the policy period, typically one year. It sets the ceiling on the insurer's obligation for the policy term. Once the total of all claims (including legal fees and other covered expenses) reaches this limit, the policy will not cover any additional claims. Each claim paid reduces the aggregate amount available for future claims.

In summary, your policy limits indicate that any single claim will be covered up to $1,000,000, but the total of all claims in the policy period cannot exceed $3,000,000.