Commercial Insurance Limits Explained

General commercial insurance covers have limits both in terms of the number of liabilities they cover, and the maximum amount in damages which is covered for each liability cover. By knowing the limits on your commercial liability cover, it is easier to plan your finances and take precautionary actions such as buying an umbrella which increases your limit on various liabilities.

Commercial insurance policies offer covers on  bodily injury, property damage, personal injury and advertising injury. Some policies may have exclusions which will reduce the number of liabilities covered by your policy or endorsements which increase your policy’s cover.

A general commercial insurance cover has six limits which are listed in its declaration. These are: general aggregate limit, products-completed operations aggregate limit,  personal and advertising injury limit, damage to premises rented to you limit and the medical expenses limit. All these limits are interrelated meaning that the amount paid for damages on one limit affects the other limits in your policy. Also, the limit on your general commercial liability policy remains the same despite the number of people filing suits against you, the number of claims and the number of people insured.

• General Aggregate Limit – this is the total amount your insurance company is willing to pay for all the damages which occur in your insurance policy period. When the general aggregate is reached the insurance policy becomes exhausted, and the insurance company cannot make any more payments on damages for the insured.
• Products-Completed Operations Aggregate Limit – this is the maximum amount your insurance company is obligated to pay for any bodily injury or property damage under your products-completed operations hazard. Damages in the products-completed operations are injuries which are as a result of your work or your products which occur outside your business premises.
• Personal and Advertising Injury Limit – this is the maximum amount of money your insurance company is willing to pay for all damages due to personal and advertising injuries.
• Each occurrence limit – this is the maximum amount your insurance cover will pay for any one claim due to medical payments, property damage and bodily injury.
• Damage to Premises Rented to You Limit – this is the maximum amount your insurance policy is obligated to pay  to fix any damages to any property your business rents.
• Medical expenses limit – this is the maximum amount your insurance company is obligated to pay in terms of medical fees after an accident in your business premises irrespective of who is at fault for the accident.