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Insurance glossary · How policies work

per-occurrence limit.

The short answer

The per-occurrence limit is the most a policy pays for a single incident, no matter how many people or claims come out of it.

Nick McClish, Managing Partner, Riza Risk (licensed insurance agency) · Updated October 1, 2026

What counts as one occurrence?

An accident, including continued or repeated exposure to the same harmful conditions. One fire, one collapse or one leak is usually one occurrence, even if it injures several people or damages several properties. Courts sometimes disagree about whether a series of related events is one occurrence or several.

How is the per-occurrence limit different from the aggregate limit?

The per-occurrence limit caps what the policy pays for any single occurrence. The aggregate caps what it pays for all occurrences in the policy year. A big claim can hit the per-occurrence limit; many claims can use up the aggregate.

What do the limits on a general liability policy mean?

They’re usually written as two numbers, like one figure per occurrence and a larger general aggregate, plus separate limits for products and completed operations, personal and advertising injury, damage to rented premises and medical payments. Each one caps a different kind of claim.

Do defense costs reduce the per-occurrence limit?

On most standard general liability policies, no: defense is paid in addition to the limits. Some policies, especially professional, management and some specialty liability, include defense inside the limit, which means legal fees use up the money available to pay a claim.

How much per-occurrence limit do contractors usually carry?

It depends on the work and the contracts. Many commercial contracts set a minimum per-occurrence limit and expect an umbrella above it, and some state licensing boards set their own minimums. Your contracts are usually the deciding factor.

What happens if a claim is bigger than my per-occurrence limit?

An umbrella or excess policy, if you have one, pays above it up to its own limit. Without one, the amount above the limit is yours to pay. That gap is why contracts that set a per-occurrence minimum often require an umbrella too.

Does a per-occurrence limit apply to additional insureds?

Yes. Additional insureds share your limits, so a claim against a general contractor on your policy uses the same per-occurrence and aggregate limits as a claim against you.

Do states require minimum per-occurrence limits?

Some do for contractors, as a condition of a license or registration, and some only for certain trades. Others leave it to local governments or contracts. The notes below cover Riza’s licensed states in detail and every other state in a line.

in the states where Riza is licensed.

Riza is a licensed insurance agency in New York, Colorado, Texas, Florida, Massachusetts, Arizona, Nevada, North Carolina, New Jersey and Georgia. Notes below cite the law they come from. Detailed write-ups cover Arizona, Nevada, Texas, North Carolina and New York. One-line notes for other licensed states appear with them when this term has one.

every other state.

How it works everywhere else, with the rule each line comes from. Riza is not licensed in these states.

by trade.

  • General contractorsOwners set your minimum limits, and you set them for your subs, usually with an umbrella requirement above.
  • PlumbingCommercial contracts commonly set per-occurrence minimums for plumbing subs, and some state licenses do too.
  • ElectricalElectrical licenses in several states require proof of liability insurance at set minimums.
  • RoofingRoofing contracts often require higher limits than other trades because of the severity of roofing claims.

where you’ll see it.

  • Declarations page“Each occurrence limit” at the top of the limits section.
  • Contracts“Commercial general liability with limits of not less than … each occurrence.”
  • License applicationsProof of liability insurance at the board’s minimum limits.

limits that match the contracts you sign.

Riza reads the limits your contracts and licenses require, sets your general liability and umbrella to meet them, and checks that additional insureds sharing your limits doesn’t leave you short.

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Aggregate limitPer-project aggregate

Coverage it touches: General liability