An aggregate limit is the maximum an insurance policy will pay for all covered claims during a defined policy period, subject to its terms.
Definition
An aggregate limit sets a ceiling on the insurer's total payment for covered claims during a policy period, subject to the policy's terms, exclusions, and other limits. A policy may also state a per-claim limit, which applies to an individual claim. For an engineering firm owner, the distinction matters when reviewing insurance requirements in client contracts or assessing how much stated coverage remains after claims. The policy wording controls how the limit applies, and firms may carry separate limits for different coverage parts or types of claims. An aggregate limit is not the same as a deductible or self-insured retention, which describes amounts the insured may have to pay before coverage responds. It is also not a promise that every claim will be covered or paid up to the limit. Coverage depends on policy conditions, facts, and exclusions, so the stated number alone does not describe the full protection.
How owners use it
- Compare contract insurance requirements with the policy's per-claim and aggregate limits.
- Track reported claims and policy details during contract review or renewal discussions.
- If a policy has a $2,000,000 aggregate and covered payments total $500,000, the remaining aggregate is $2,000,000 - $500,000 = $1,500,000.
