What Does Insurance Per Project Aggregate Mean?

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Commercial general liability insurance policies all have a limit of liability which is the most the policy will pay on behalf of its insured. A per project aggregate limit extends the limit to apply separately to each insured construction project.

Per Occurrence Limit

The most a commercial general liability pays per claim is known as the per occurrence limit. This limit applies regardless of the number of individual claims arising out of any one occurrence.

General Aggregate Limit

Subject to the per occurrence limit, the most the policy will pay in total is known as the general aggregate limit. In many instances, the general aggregate will either be the same as the per occurrence limit or double the per occurrence limit.

Per Project Aggregate

When insuring construction activity, it is possible to secure a separate aggregate limit to apply to each construction project. This will extend the total available limits of coverage. However, it will not increase the per occurrence limit.

Advantages

The per project aggregate is important for contractors who work on multiple projects. Instead of purchasing separate policies, it is more cost effective to dedicate limits to each project as necessary.

Disadvantages

Use of the per project aggregate may lull contractors into a false sense of security as it does not increase the per occurrence limit nor does it increase the completed operations limit.

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About the Author

Living in Southern California, Tom Zuo is a risk-management professional with decades of experience. He has been writing since 1985, specializing in topics related to insurance and risk management. Zuo holds a Bachelor of Arts in English and mass communication.

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