Aggregate limit in Canada: how a total policy-period cap affects liability coverage.
An aggregate limit is the maximum total amount an insurer will pay under a specified coverage during the policy period, even if multiple claims occur.
A reader may understand the per-claim limit but still miss the total cap that applies once several claims add up over the year.
Aggregate limits appear most often in liability-oriented coverage, including many commercial policies. The policy may state how much can be paid for one occurrence and also how much can be paid in total for all covered occurrences during the policy term.
This matters for businesses, contractors, landlords, and organizations facing repeated liability exposure rather than one isolated loss. The first claim may fit comfortably within the per-occurrence limit, but each later claim can erode what remains available under the annual aggregate.
The wording also matters because the aggregate may apply to the entire policy, to a specific coverage part, or to a particular hazard such as products-completed operations. Defence costs may also interact with the available limit differently depending on the form.
A contractor may have a liability policy with a per-occurrence limit and a larger aggregate limit for the year. One claim may fit comfortably within the single-occurrence limit, but several claims can erode the annual aggregate and leave less protection later in the policy term. A business that focuses only on the per-occurrence number can miss that the policy is becoming less useful as the year progresses.
Aggregate limit is not just another way to say policy limit. It is a specific kind of cap that measures the total paid across multiple claims or a defined coverage part.
It is also wrong to assume personal-lines property coverage always uses the same structure. Aggregate limits are especially important in commercial liability settings.
Readers also sometimes assume the aggregate automatically refreshes after each claim. It usually does not. It typically resets only when a new policy period begins, unless the wording provides some different mechanism.
The wording can vary by insurer and coverage form. Some aggregates apply broadly, while others attach only to a particular hazard, product line, location, or coverage extension.