“Any One Occurrence” or “in the Aggregate” Liability Policy Limits
Cover under a public/products or employers’ liability policy is underwritten on an “any one claim” basis. Professional indemnity is generally offered on an “in the aggregate”, meaning the total limit throughout the duration of the policy.
It is important to understand “in the aggregate” or “any one claim” as this will be the maximum amount your insurer will pay out for a claim, and the basis of these terms may mean cover differs greatly.
What is a limit of indemnity under an “any one occurrence” basis?
The limit of indemnity under the policy represents the insurer’s maximum liability in respect of any one claim or occurrence under the policy. This means that the limit under the policy is available in full, in respect of the first claim in a year and any subsequent claims in the same year.
When a policy is on an “any one claim” basis, then the insurance customer is entitled to the full limit of indemnity for each and every claim made. For this reason, “any one claim” is also frequently referred to as “per occurrence”, “per claim”, and “each and every claim”. Unlike with “in the aggregate” where the cost of each claim is deducted from the total limit available, with “any one claim” policies each claim is allocated 100% of the indemnity limit.
What is a limit of indemnity on an “in the aggregate” basis?
The limit of indemnity represents the insurer’s maximum liability under the policy, for all claims made in the period of insurance. This means that the limit under the policy is effectively reduced following the first claim by the amount of the first claim and reduced by each subsequent claim.
Once it’s exhausted, it’s gone. That’s it.
This is unlikely to be an issue for most businesses, but larger businesses or those who work on complex contracts will find reassurance that they won’t run out of cover when they need it.
Which is best for me, “any one claim” or “in the aggregate”?
When comparing quotes that are otherwise the same, the “any one claim or occurrence” basis is certainly preferable, as the full limit of indemnity applies to all claims. If you are unfortunate enough to have a significant claim made against you, you may find that your cover is reduced to an unacceptable level on an “in the aggregate” basis.
Which basis applies to which policies?
· Public liability insurance policies are generally issued on an “any one occurrence” basis.
· Product liability insurance is generally arranged on an “in the aggregate” basis.
· Employers liability is always issued on an “any one occurrence” basis as this is a legal requirement.
· Professional indemnity insurance is issued on both bases, depending upon the provider and the product.
· Directors and Officers liability insurance was traditionally issued “in the aggregate”, but recent trends have seen insurers move to an “any one occurrence” basis.
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