The aggregate limit is an insurance policy provision that places a ceiling on the amount of coverage payable for all claims that arise within a specified period, such as a policy year. It represents the maximum sum an insurer will pay for all covered losses sustained during the policy term. Once the aggregate limit is reached, the insurer will not cover any additional claims or losses within that term. This limit is designed to cap the insurer’s liability, ensuring that they are not responsible for limitless losses. The aggregate limit can apply to various types of insurance policies, including liability, health, and property insurance. For example, in the context of liability insurance, if a policy has an aggregate limit of $1 million, and the insured has already had claims paid out totaling that amount during the policy period, any subsequent claims will not be covered until the policy is renewed and the aggregate limit is reset.
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