What it means
A commercial general liability policy has several limits. The general aggregate caps the total paid for covered bodily injury, property damage, personal and advertising injury and medical payments during the policy period, except claims that fall under the products and completed operations aggregate.
Once the aggregate is used up, the policy will not pay further claims subject to it for that policy period. Defense costs on standard ISO forms are usually paid in addition to limits, so they do not erode the aggregate, though some policies differ.
Many contracts ask for a general aggregate of 2,000,000 with a 1,000,000 each occurrence limit. Contracts may also require the aggregate to apply per project or per location.
An example
Valley Landscape Services has a 2,000,000 general aggregate. Two premises injury claims settle for a combined 1,400,000 in March, leaving 600,000 for the rest of the policy year, because the policy has no per project or per location aggregate.
Names in this example are fictional.
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What happens when the general aggregate is exhausted?
The policy stops paying claims that fall under that aggregate for the rest of the policy period. An umbrella policy may then respond in its place, depending on its terms. That is why contracts often require an umbrella and why contractors working many jobs consider per project aggregates.
Does the general aggregate include completed operations claims?
Usually not. Standard policies have a separate products and completed operations aggregate for claims arising from finished work or products sold. The general aggregate covers most other claims, such as injuries on premises or during ongoing work. Both appear on the declarations page and should be checked against contract requirements.
General information only. It is not legal or insurance advice. Only issued policy documents and endorsements describe actual coverage.