Skip to main content

The risk library  /  What the policy says

Art. 10 · What the policy says · 3 min read

Aggregate limits and per-event limits

The same headline number can mean "£5m for each thing that goes wrong" or "£5m for everything that goes wrong all year." Only one of those survives a bad year.

A per-event limit (also "per occurrence", "any one claim") is the most the policy will pay for a single incident, and it resets for the next one. Three separate incidents can each draw on the full limit.

An aggregate limit is the most the policy will pay across the whole period, added up. Once it is used, it is gone until renewal, and there is nothing that automatically tells you how much is left.

£5m FOR ANY ONE EVENT limit available: £5m, all year £2.0m £2.5m £3.0m ALL PAID IN FULL £5m IN TOTAL FOR THE YEAR limit remaining £2.0m £2.5m £0.5m paid £2.5m NOT COVERED Jan Dec
  • Paid by the policy
  • Falls back on the business
Fig. 11 · Identical claims, identical headline limit, £2.5m of difference. Aggregates are common on liability, products, cyber, and on specific perils such as flood or subsidence within an otherwise per-event policy.

Aggregates are not a trick. They are how an insurer caps its own exposure, and they make cover available that otherwise wouldn't be. The problem is purely that businesses read the number and not the word next to it.

Two related things to check. First, some policies carry an aggregate on certain perils only, buried in an endorsement. Second, defence costs may sit inside the limit rather than in addition to it. A long liability dispute can consume a large part of your cover before any damages are paid.

Use it

  • Go through the schedule and mark each limit. Per event, or in the aggregate? On liability policies especially.
  • Ask whether defence costs are inside the limit. "Costs inclusive" and "costs in addition" are very different products.
  • Track erosion after any claim. If you have an aggregate and you've claimed, write down what's left. Nobody else will.

Want this run against your own numbers?

We put ranges, not single figures, against the risks your business actually carries.

Speak with an expert

Explanatory content only. This article describes how insurance and risk decisions work in general terms; it is not insurance, legal, actuarial, or investment advice, and it is not a recommendation to buy, keep or cancel any cover. Every figure and diagram is illustrative, chosen to make a mechanism visible, not to describe any particular business.