General Aggregate vs. Per-Occurrence Limits

A commercial general liability policy carries two different numbers on its declarations, and boards routinely read only the first. The per-occurrence limit is the most the policy pays for any single claim or event, for example a single slip and fall at the pool. The general aggregate limit is the most the policy pays for all covered claims added together across the whole annual policy period. On the standard ISO commercial general liability form these are stated as separate lines, and the aggregate is commonly set at two to three times the per-occurrence figure, so a policy shown as one million dollars per occurrence often carries a two-million to four-million-dollar general aggregate. There is no statute that sets the aggregate number; it is a structural feature of how the CGL form is built and priced, not a regulatory floor like the per-occurrence limit that lenders require. Aggregate erosion is the mechanic that catches boards off guard: on the standard ISO commercial general liability form (CG 00 01), defense costs and Supplementary Payments are paid in addition to the limits and do not reduce them, but every indemnity payment the policy makes during the year, meaning settlements and judgments on claims it must pay, draws down the same shared annual aggregate. Enough claims activity in a single policy year can shrink the remaining aggregate below the per-occurrence limit, or exhaust it entirely, so that a later claim finds little or no primary coverage left even though the per-occurrence limit on paper never changed.

The per-occurrence limit is what a board checks against the lender requirement and the companion general-liability-limit item; the aggregate is what actually runs out in a bad year and it is the one nobody watches. A community that has a cluster of claims in one period, a wave of water-damage liability claims, several trip-and-fall suits, a habitability dispute, can burn through the annual aggregate on the settlements and judgments paid for the earlier losses and leave the last claim of the year effectively uninsured at the primary layer. Two consequences follow. First, the umbrella does not automatically save the day: excess and umbrella policies follow form over the underlying limits, and once the primary aggregate is exhausted the umbrella may drop down only on the terms its own wording allows, which is not the same as a fresh primary limit. Second, an exhausted aggregate is exactly what turns a covered loss into a special assessment. Confirm the general aggregate is set at a healthy multiple of the per-occurrence limit rather than at parity, ask whether the aggregate applies per location or per policy for a multi-building community, and ask the broker at renewal whether an aggregate reinstatement option is available so one heavy claim year does not leave the community bare for the months that follow.

This clause is qualitative and mechanical rather than statute-driven; no lender rule or state statute prescribes the general aggregate figure the way the roughly one-million-dollar per-occurrence floor is a lender requirement, so it grounds in how the ISO commercial general liability form is structured and in Community Associations Institute (CAI) best-practice framing for volunteer boards rather than in a citable section. It complements the committed general-liability-limit clause, which carries the per-occurrence evaluator; the aggregate side has no matching ProgramIndicators key, so the evaluator is intentionally empty and the point is board-education. Where a board wants to harden this, the aggregate multiple, a per-location aggregate endorsement for multi-building communities, and an aggregate reinstatement provision are usually matters of form and endorsement selection in the specialty community-association markets rather than large premium items.