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Insurance & Bondingaka: per-claim limitaka: occurrence limit

Per Occurrence Limit

In Plain English

The most your insurance pays for any single incident.

Definition

The per occurrence limit is the maximum amount an insurer will pay for any single covered event or claim under a liability policy, regardless of the number of claimants involved. This limit resets with each separate occurrence during the policy period, subject to the overall general aggregate limit. For example, a policy with a $1 million per occurrence limit and a $2 million aggregate will pay up to $1 million per event but no more than $2 million total in a policy year.

Why It Matters in Bidding

The per occurrence limit determines whether a contractor's liability coverage is adequate for the projects it bids, and owners' insurance requirements in the bid documents often specify minimum per-occurrence and aggregate amounts. Estimators reviewing insurance specs must confirm the firm's policy meets those minimums, since failing to carry required limits can render a bid non-responsive or trigger costly mid-project coverage upgrades.

Example

Reviewing the front-end documents, an estimator confirms the firm's $1 million per-occurrence and $2 million aggregate limits satisfy the owner's insurance requirements before submitting the bid.

Related Terms

General AggregateCommercial General Liability (CGL)Umbrella Policy

Frequently Asked Questions

The per-occurrence limit caps what the insurer pays for any single event, while the aggregate limit caps total payouts during the entire policy period across all occurrences. A policy might pay the full per-occurrence amount on one claim yet exhaust the aggregate after several claims, leaving later losses uncovered.
Required limits are set by the owner in the bid or contract documents and vary by project size and risk. Larger or higher-risk projects often demand higher per-occurrence and aggregate limits, sometimes supplemented by excess or umbrella coverage. Always read the insurance exhibit and match limits before bidding.
Yes, the per-occurrence limit applies fresh to each separate covered event, but only up to the policy's overall aggregate limit. Once cumulative payouts reach the aggregate, no further coverage remains for that policy period even if individual occurrences fall within the per-occurrence cap, which is why aggregate adequacy matters too.

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