A business can buy a CGL policy with a headline limit that looks substantial and still misunderstand how much protection remains after several claims. The reason is that CGL limits are layered rather than represented by one single number.
The California Department of Insurance explains that CGL policies have separate limits for different liability areas and an aggregate limit that can be exhausted by claims during the policy period. It also notes a separate aggregate for products and completed operations liability claims.
Start with the each-occurrence limit
The each-occurrence limit is the maximum available for covered damages subject to that limit arising from one occurrence, after applying the policy terms. If one covered accident creates bodily injury to several people and property damage, the occurrence limit can become the first ceiling encountered.
That does not mean every event is automatically one occurrence. How claims are grouped can depend on facts, policy wording and applicable law. The important point for a buyer is that a large single event can consume a meaningful portion of the policy’s available protection.
What the general aggregate does
An aggregate limit is a policy-period ceiling for covered claims that fall within that aggregate. California’s commercial insurance guide explains that when total claims subject to the annual aggregate exceed the stated limit, the applicable limit can be exhausted for the remainder of the policy period.
Imagine a policy with a $1 million each-occurrence limit and a $2 million general aggregate. Three unrelated covered premises claims of $800,000 each would not each exceed the occurrence limit, but together they total $2.4 million. In a simplified example, the general aggregate can become the binding limit before the year ends.
Products-completed operations aggregate
Products and completed operations losses can have a separate aggregate. This matters for manufacturers, contractors and other businesses whose liability can emerge after a product leaves their control or work has been completed.
A contractor may have no open-job injury during construction but later face a claim alleging completed work caused property damage. A manufacturer may face a bodily injury claim after a product has been sold. Those exposures are different from a slip-and-fall at the business premises, and standard CGL structures recognize the distinction.
| Limit | What it generally controls | Why it matters |
|---|---|---|
| Each occurrence | Maximum for covered damages arising from one occurrence, subject to policy terms | A single severe event can reach it |
| General aggregate | Policy-period maximum for claims subject to that aggregate | Multiple smaller claims can exhaust it |
| Products-completed operations aggregate | Policy-period maximum for covered products/completed-operations claims | Separate long-tail exposure can consume this bucket |
| Other sublimits/limits | Specific coverage categories such as medical payments or damage to rented premises, depending on form | The headline CGL limit may not apply identically to every coverage |
Why certificates of insurance can mislead buyers
A certificate can display CGL limits, but it is evidence of insurance—not a substitute for the policy. Contracting parties should not treat a certificate as proof that every requested endorsement, additional-insured status or contractual requirement is satisfied. Our additional insured vs. certificate holder guide explains that distinction.
Aggregate erosion during the policy year
Businesses should ask whether known claims have eroded an aggregate, particularly when entering a major contract late in the policy term. A $2 million aggregate printed on a declarations page does not necessarily mean the full $2 million remains available after earlier covered claims.
Claims-made liability forms can introduce additional timing considerations, but the standard CGL occurrence framework is different. See claims-made vs. occurrence insurance for the trigger distinction.
Where a commercial umbrella may help
A commercial umbrella or excess liability policy can provide limits above scheduled underlying policies, subject to its own attachment points, terms and exclusions. It does not automatically broaden every exclusion in the CGL. Our commercial umbrella vs. excess liability guide explains how the structures can differ.
Business review checklist
- Record each CGL limit from the declarations, not just the largest number.
- Ask which claims erode the general aggregate and which use the products-completed operations aggregate.
- Review whether the aggregate applies per policy, per location or per project when endorsements modify the standard structure.
- Check known claims and remaining aggregate before major renewals or contracts.
- Confirm contractual insurance requirements against the actual policy and endorsements.
- Review umbrella/excess attachment points and underlying-limit requirements.
Frequently asked questions
If my CGL has a $1 million occurrence limit and a $2 million aggregate, can one claim receive $2 million?
Not from the CGL simply because the aggregate is $2 million. The each-occurrence limit can cap a single occurrence even when aggregate capacity remains.
Does the aggregate reset after every claim?
No. It is generally a policy-period maximum for claims subject to that aggregate, although endorsements and policy structures can change how it applies.
Are products claims part of the general aggregate?
Standard CGL structures commonly use a separate products-completed operations aggregate. Confirm the actual declarations and form.
Does a certificate prove the aggregate is untouched?
No. A certificate is not a real-time claim ledger and does not replace the policy or loss information.
Sources & further reading
Reviewed October 6, 2026. CGL forms, endorsements and state law can change how limits apply. Always read the declarations and policy wording for the specific contract.
