Answer-first summary: The per occurrence limit is the most your commercial general liability (CGL) policy pays for any single claim or incident — typically $1 million. The general aggregate limit is the total the insurer will pay for all covered claims combined during your policy period (usually one year) — most commonly $2 million. Once the general aggregate limit is exhausted, no further claims are covered until renewal.
Who this is for: Business owners, contractors, property managers, and risk managers shopping for or reviewing a CGL policy who need to understand how their liability limits actually work.
TL;DR / Key Takeaways
- The per occurrence limit caps what your insurer pays on any one incident — it resets with each new, separate claim.
- The general aggregate limit is the policy-period maximum across all claims combined; it does NOT reset mid-term.
- The most common small-business CGL limit pair is $1M per occurrence / $2M general aggregate.
- A products-completed operations aggregate is a separate, third limit that applies only to bodily injury and property damage arising from your work after it is finished — important for contractors.
- When a project owner or lender requires "not less than $2M aggregate," they mean the general aggregate — make sure your limit meets or exceeds that figure at the time of the request.
What Is the Per Occurrence Limit?
The per occurrence limit (also written as "each occurrence") is the maximum dollar amount your CGL insurer will pay for bodily injury or property damage arising out of a single occurrence — one event or continuous exposure to substantially the same harmful conditions.
How it works
- A customer slips and falls in your shop → one occurrence. Your insurer covers damages up to the per occurrence limit.
- A burst pipe in your building floods three tenant suites → if it traces to one continuous event, most adjusters treat it as one occurrence.
- Each new occurrence is evaluated independently, but all payments in aggregate reduce your general aggregate.
Typical per occurrence limits
| Business Size | Typical Per Occurrence Limit | Notes |
|---|---|---|
| Sole proprietor / micro-business | $500,000 | Minimum many landlords accept |
| Small business (most trades) | $1,000,000 | Industry standard; most common |
| Mid-market / general contractor | $1,000,000–$2,000,000 | Often required by project owners |
| Large contractor / manufacturer | $2,000,000+ | Usually supplemented by umbrella/excess |
What Is the General Aggregate Limit?
The general aggregate limit is the ceiling on all covered CGL claims combined during a single policy period (typically 12 months). It is not per-claim — it is cumulative.
What counts against the general aggregate?
Under a standard ISO CGL form (CG 00 01), the following payments erode the general aggregate: - Bodily injury and property damage (Coverage A) claims — except those under the products-completed operations hazard, which erode the separate products aggregate - Personal and advertising injury claims (Coverage B) - Medical payments (Coverage C)
Defense costs may or may not erode the limit depending on whether your policy is "defense within limits" (wasting) or "defense outside limits" — always confirm which applies.
What does NOT count against the general aggregate?
- Damages covered under the products-completed operations aggregate (a separate limit)
- Claims or damages excluded by the policy (e.g., professional liability, auto, workers comp)
General Aggregate vs Per Occurrence: Side-by-Side Comparison
| Feature | Per Occurrence Limit | General Aggregate Limit |
|---|---|---|
| Applies to | One single event/claim | All claims during policy period |
| Resets each claim? | Yes — new claim, new limit | No — erodes over the year |
| Resets at renewal? | Yes | Yes |
| Typical ratio | 1x | 2x the per occurrence limit |
| Example ($1M/$2M policy) | $1,000,000 max per event | $2,000,000 max for the year |
| Exhaustion consequence | Excess claim goes unpaid (or to umbrella) | No further CGL coverage until renewal |
| Listed separately on dec page? | Yes — "Each Occurrence" | Yes — "General Aggregate" |
The Products-Completed Operations Aggregate: The Third Limit You Must Know
Contractors, manufacturers, and service businesses face a third distinct aggregate: the products-completed operations aggregate. It covers bodily injury and property damage arising from: - Products you manufactured or sold, after they leave your custody - Work you completed, after you have left the job site
This limit typically equals the general aggregate (e.g., $2M in a $1M/$2M policy). It erodes separately, so a string of post-completion defect claims does not eat into the general aggregate protecting your on-going operations.
Contractors: project owners frequently require this limit to remain at $2M for the full statute of repose period. Always confirm what is on your certificate.
How Limit Erosion Works: A Step-by-Step Example
Here is how the limits interact on a $1M per occurrence / $2M general aggregate CGL policy during a single policy year:
- January — Slip-and-fall claim: A visitor breaks a wrist at your premises. Insurer pays $150,000. General aggregate remaining: $1,850,000.
- April — Property damage claim: Your crew accidentally damages a neighboring tenant's equipment during renovation. Settlement: $400,000. General aggregate remaining: $1,450,000.
- August — Large bodily injury verdict: A contractor working on your property is seriously injured and wins a $1,100,000 jury verdict. The per occurrence limit caps the payment at $1,000,000. General aggregate remaining: $450,000.
- November — Another slip-and-fall: Settlement offer is $600,000. Your per occurrence limit is $1,000,000, but only $450,000 remains in the aggregate. Your insurer pays $450,000; you are exposed for $150,000 — unless you carry umbrella/excess liability that drops down.
Lesson: High-frequency or high-severity years can exhaust the aggregate before year-end. An umbrella policy (which sits above both limits) is the standard solution.
Real-World Scenario: General Contractor, New York, $1M/$2M CGL
The following is an illustrative example, not a guarantee of coverage or outcome.
Business: A mid-size general contractor in New York City with $4M in annual revenue, primarily working on commercial tenant improvement projects.
Policy: $1,000,000 per occurrence / $2,000,000 general aggregate / $2,000,000 products-completed operations aggregate. Annual CGL premium: approximately $8,000–$14,000 (rates vary by classification, experience, and carrier).
Year scenario: - March: A subcontractor's employee claims bodily injury on site — settled for $275,000 (general aggregate: $1,725,000 remaining). - July: Property damage to an adjacent tenant suite from improper demo — $310,000 (general aggregate: $1,415,000 remaining). - October: A completed project has a water intrusion claim filed post-completion — $900,000 settlement. This erodes the products-completed operations aggregate (now $1,100,000 remaining), not the general aggregate.
Outcome: The GC's general aggregate is partially eroded ($1,415,000 remaining) but intact for the rest of the year. Without a separate products aggregate, the October claim would have brought the general aggregate down to $515,000 — leaving the business dangerously underprotected for year-end operations.
New York-specific note: New York's Labor Law Sections 240 and 241 create unusually broad contractor liability for gravity-related injuries. Many New York GCs carry a $5M umbrella or excess policy above their primary CGL for this reason. [verify state law applicability with counsel]
How to Read Your CGL Declarations Page in 5 Steps
- Locate the "Limits of Insurance" section on page 1 of your declarations (dec page) — it lists all limits in a standard table.
- Find "Each Occurrence" — this is your per occurrence limit.
- Find "General Aggregate" — this is your annual combined cap.
- Find "Products-Completed Operations Aggregate" — confirm it equals your required limit (often $2M).
- Check "Personal and Advertising Injury" — this is usually equal to the per occurrence limit and erodes the general aggregate, not a separate bucket.
If a contract or landlord requires specific limits, compare their requirement against each line item — not just the general aggregate.
Frequently Asked Questions
Q: What is the difference between general aggregate and per occurrence in simple terms? Per occurrence is the max payout for one incident; general aggregate is the max payout for all incidents combined in the policy year. Think of the general aggregate as a bucket — each occurrence claim draws water from the same bucket until it empties.
Q: Does the general aggregate reset every year? Yes. Both the per occurrence and general aggregate limits reset at each policy renewal. However, they do not reset mid-term — even if a single catastrophic claim exhausts the aggregate in January, you have no CGL coverage for the remaining 11 months unless you purchase reinstatement or a new policy.
Q: What happens if a single claim exceeds my per occurrence limit? Your CGL insurer pays up to the per occurrence limit. Any amount above that becomes your responsibility — unless you have an umbrella or excess liability policy, which steps in above the primary per occurrence limit.
Q: My contract requires $2M per occurrence. Is that common? $2M per occurrence requirements are increasingly common for larger commercial construction contracts, government projects, and franchise agreements. Most small businesses carry $1M per occurrence backed by a $1M–$5M umbrella, which satisfies a $2M per occurrence requirement at lower cost than doubling the primary limit.
Q: Does defense cost erode my aggregate? It depends on your policy form. "Defense inside the limit" (also called a wasting or burning policy) means defense costs reduce both the per occurrence and aggregate limits. "Defense outside the limit" means legal defense is paid on top of, and does not reduce, your coverage limits. Policies with defense outside the limit are generally preferable and typically command a slightly higher premium.
Q: Is the products-completed operations aggregate the same as the general aggregate? No — they are separate pools. Products-completed operations claims erode only the products-completed operations aggregate. General liability claims from ongoing operations erode only the general aggregate. On most standard $1M/$2M CGL policies, both aggregates are set at $2M, but they run independently.
Q: Can I buy higher aggregate limits without changing per occurrence? In most cases, yes. Carriers can often write $1M/$3M or $1M/$4M structures, or you can purchase a project-specific aggregate endorsement (also called a per-project aggregate) that gives each project its own aggregate — common in construction.
Q: What is a per-project aggregate endorsement? A per-project aggregate endorsement (ISO form CG 25 03) gives each separate construction project its own general aggregate limit. Without it, all projects share one aggregate. For contractors running multiple simultaneous jobs, this endorsement significantly reduces the risk of one large project wiping out aggregate protection for all other jobs.
Why Morrow for Your CGL Limits Review
- Independent agency, multiple carriers: Morrow places business with multiple admitted and E&S carriers, so we compare actual policy language — not just prices. We identify whether a quoted policy uses defense-inside or defense-outside limits, and flag products aggregate shortfalls before they become a problem.
- Contractor and trade specialization: We regularly work with general contractors, specialty trades, and property managers in markets (like New York) where aggregate adequacy is business-critical. We understand Labor Law exposure and structure limits accordingly.
- Fast certificate and COI turnaround: When a project owner demands proof of $2M aggregate before work begins, we turn certificates around the same day — with accurate limit language that matches your contract requirements.
- Aggregate reinstatement and umbrella structuring: We proactively discuss umbrella and excess options that sit above your CGL aggregates, so a bad year does not leave you exposed.
- Claims advocacy: If a claim erodes your aggregate mid-year and you need to address coverage gaps, Morrow works with you and the carrier — not just the adjuster — to find solutions.
Get Your CGL Limits Reviewed
Not sure if your current per occurrence and aggregate limits match your contract requirements and exposure? Get a quote or coverage review from Morrow →
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Internal Links
- Commercial General Liability Insurance — Overview
- Umbrella vs Excess Liability: What's the Difference?
- What Is an Additional Insured?
- General Liability Insurance Cost Guide
- General Liability for Contractors
Author: James R. Whitfield, CPCU, CIC — Commercial Lines Coverage Specialist with 14 years placing CGL and excess liability programs for contractors, property managers, and mid-market businesses. James holds the Chartered Property Casualty Underwriter (CPCU) and Certified Insurance Counselor (CIC) designations.
Published: June 2026 | Last updated: June 2026
Sources: - Insurance Services Office (ISO), Commercial General Liability Coverage Form CG 00 01 - National Association of Insurance Commissioners (NAIC), CGL Policy Guidance - Insurance Information Institute (III), "Understanding Your Commercial Liability Policy" - New York Workers' Compensation Board and New York Labor Law §§240, 241 (for state-specific references) - IRMI (International Risk Management Institute), Glossary of Insurance and Risk Management Terms