Per-Occurrence Limit

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Per-Occurrence Limit A per-occurrence limit, also known as a claim limit, is a crucial concept in insurance policies, particularly liability insurance policies. It defines the maximum amount the insurance company will pay for a single incident, regardless of how many people are injured, how much property is damaged, or how many claims arise from that incident. Example: Imagine you have a general liability policy with a per-occurrence limit of $1 million. If you accidentally cause a car accident injuring two people, and the total cost of medical bills and lost wages for both is $800,000, the insurance company would cover that amount. However, if the combined costs reach $1.2 million, the insurance company would only pay up to the $1 million limit, leaving you responsible for the remaining balance. Many small business insurance policies limit the amount of money they will pay for a single incident. This amount is known as a per-occurrence limit. Third-party liability policies (policies that cover lawsuits from people outside your business) usually have a per-occurrence limit. That includes general liability insurance and cyber liability insurance policies. Why are per-occurrence limits necessary? -They give you flexibility in tailoring the right amount of protection for your business’s risk exposures. -They help insurers limit their total liabilities and claims expenses so they can remain financially strong. Per-occurrence limits play a vital role in managing your financial risk in case of a covered incident. By understanding this concept and choosing the right limits, you can ensure you have adequate protection against potential liabilities. #BeNewinsurance #InsurTech #inclusiveinsurance #insurance #reinsurance #takaful

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