A general aggregate is a crucial term in commercial general liability insurance that all policyholders need to understand.
In commercial general liability insurance, the general aggregate is the maximum amount of money the insurer will pay out over the life of the policy. The general aggregate limit sets a ceiling on the insurer’s obligation to pay for property damage, bodily injury, medical expenses, lawsuit, etc., that may arise during the term of the insurance policy. As with all other insurance coverage, the higher the commercial liability insurance coverage, the higher the premium.
Reading: What is general aggregate insurance
Under this, the coverage will pay any claim, loss and demand in which an insured is involved, until the total limit is reached. that could happen in the case of a single large claim or multiple small claims.
in certain situations, the overall aggregate limit is reset in some situations. once the aggregate limit has crossed the maximum limit under the current policy term, it generally does not reset until the next policy renewal. however, some insurance companies facilitate the reinstatement of the added limit once it is exhausted. although you would have to pay more to get this feature; guarantees a double safety net.
Like other business entities, insurance companies also face risks. their goal is to offer you the protection you need for your business while reducing your risks. here the general aggregate can help balance the insurer’s risks with the help of the insured protection.
read more: what are the additional expenses covered by commercial general liability insurance?
Losses or damages paid in connection with medical expenses are also covered by the overall aggregate limit. Once the insured has exceeded the general aggregate limit, the commercial general liability insurance company will not be obligated to indemnify the losses. means that litigation costs that occur or claims that are made after the aggregate limits have been exhausted must be settled by the policyholder himself.
If you’re in business where lawsuits can incur high costs, you might consider opting for a high coverage limit when you apply for the policy. Keep this in mind when opting for the insurance policy that comes with a higher aggregate limit; it can actually reduce your risks.
Should you have questions about the amount of commercial general liability insurance coverage to choose, you can enlist the help of securenow, a leading corporate insurance advisor who will determine the correct balance of liability coverage for different types of insurance. needs of your company.
since 2009, r.s chemical has been working in the industry. Last year, the chemical manufacturer had to deal with a big part when it accidentally poured flammable liquid into the city’s sewer system. caused an explosion that caused chaos throughout the area.
read more: who is insured under commercial general liability insurance?
The explosion caused serious damage to the city, as the streets were destroyed and the transport system stopped. other businesses in the vicinity of the explosion also had to face a difficult time as access to the neighborhood had been cut off. the blast also damaged property belonging to other businesses.
Because r.s chemical had a commercial general liability insurance policy, they approached the insurer for claim settlement. the total coverage available was Rs 50 lakh. the insurer appointed a surveyor to inspect the construction site and found the loss to be valid. here, the insurer settled the claim accordingly. as the extent of the loss was large, the total sum insured was used to settle a claim.
A few months ago, r.s chemistry had to face another loss when the dyes manufactured by it caused severe irritations and other ailments. A case was filed against R.S Chemical, who approached the insurer for settlement of the claim. although the claim was valid; the insurer refused to settle it because the policyholder had already exhausted his coverage limit.