Per Occurrence Limit
The maximum amount a CGL policy will pay for all damages arising from a single occurrence, including bodily injury and property damage.
What It Is
The per occurrence limit is the maximum amount the CGL insurer will pay for the sum of all bodily injury and property damage claims arising from a single occurrence. It is the most frequently referenced limit on a CGL policy and is the figure shown in the "Each Occurrence" field on the ACORD 25 certificate.
The standard per occurrence limit for most commercial accounts is $1,000,000, though it can be written at higher limits such as $2,000,000 or $5,000,000. The per occurrence limit applies separately to each occurrence — meaning that two unrelated incidents each have the full per occurrence limit available, subject to the general aggregate.
The per occurrence limit includes both indemnity payments and allocated loss adjustment expenses on policies where defense costs are within limits. On standard ISO CGL forms, defense costs are outside the limit (supplementary payments), so the full per occurrence limit is available for damages.
Why It Matters for Brokers
The per occurrence limit is the primary metric used in contract compliance. Virtually every commercial contract specifies a minimum per occurrence limit — typically $1,000,000 for standard operations and $2,000,000 or higher for large construction projects or high-hazard work. Brokers must match the per occurrence limit to contractual requirements and recommend umbrella or excess coverage when the required limit exceeds available CGL limits.
Real-World Example
A painting contractor's employee accidentally knocks over a scaffold, injuring two workers from another trade and damaging $90,000 worth of installed cabinetry. The total claim is $420,000 — $180,000 and $150,000 in bodily injury for the two workers, plus the $90,000 in property damage. Because all damages arise from a single occurrence (the scaffold falling), the $1,000,000 per occurrence limit applies once. The full $420,000 is covered within the per occurrence limit, and the general aggregate is reduced by $420,000.
Common Mistakes
- 1Confusing per occurrence limit with the general aggregate — the aggregate is the total the policy will pay for all occurrences combined during the policy period.
- 2Not verifying whether defense costs are inside or outside the per occurrence limit, which significantly affects the amount available for damages.
- 3Recommending a $1M per occurrence limit for a client with contracts requiring $2M without discussing umbrella or excess options.
How brokerageaudit.com Handles This
Policy Checker extracts the per occurrence limit and verifies whether defense costs are inside or outside the limit. It cross-references the limit against all active contract requirements in the account to flag any shortfalls. COI Manager populates the Each Occurrence field on ACORD 25 certificates directly from the verified policy data, preventing manual entry errors.