Aggregate limit
What it means
An aggregate limit is the most an insurer will pay for all claims in a period of insurance, no matter how many claims there are. Once it is exhausted, the policy has no more to give until it is renewed or reinstated.
It sits alongside the per-claim or per-occurrence limit; it does not replace it. A policy can have a limit for any one claim and a separate, larger cap across the year, and both apply.
Also called: aggregate limit, annual aggregate, policy aggregate
Where you meet it
- Professional indemnity policies, which are commonly written with an aggregate as well as a per-claim limit.
- Products liability sections, where the aggregate applies to all product-related claims in the period.
- Cyber policies, where response costs and third-party claims can share one annual cap.
Worked example
A consultancy holds professional indemnity cover with a per-claim limit and an annual aggregate at the same level. A claim consumes most of the aggregate early in the period.
Later claims in the same period have very little cover left, even though the policy still shows its original per-claim limit. Some policies can be reinstated for an additional premium; whether that is available is a wording question, and it is better asked before the aggregate is eroded than after.
What goes wrong with it
- A certificate showing a limit rarely says whether an aggregate applies. That answer is on the schedule.
- Defence and investigation costs commonly erode the aggregate, so the money available to settle claims shrinks faster than the claim count suggests.
- Where a contract requires a limit "per claim and in the aggregate", a policy with a lower aggregate does not comply even if the per-claim figure matches.
- Related claims can be aggregated into one. Where a wording treats claims arising from a single originating cause as a single claim, a series of similar complaints may share one limit instead of each having its own.
- The aggregate resets at renewal, not on a calendar year. Working out how much cover is left means knowing the period of insurance dates, not the date on the last claim.
Covers this clause appears in
- Professional indemnity insurance — Cover for legal liability arising from professional advice or services, written on a claims-made basis.
- Products liability insurance — Cover for legal liability arising from goods a business sells, supplies or installs, usually written alongside public liability.
Related clauses
Guides that use this
Sources
On any specific policy, the wording and the schedule govern — they are the primary source for what a clause means there. The references below are general guidance to check against, cited at the publisher level.
- Moneysmart (ASIC) — General guidance on business insurance from the regulator’s consumer site. A starting point, not a definition of this clause.