Liability Limits

From The Original Insurance Wiki

Limits- General Aggregate

This describes the maximum limit(s) available in any one policy year for all claims paid under the following categories: Each Occurrence, Personal and Advertising Injury, Medical Expenses.

Aggregate Limits per location grants a separate general aggregate limit to each location.

Aggregate Limits per job site (or per project) grants a separate general aggregate limit to each job site (or per project).

Limits - Products & Completed Operations Aggregate

Describes the maximum limit(s) available in any one policy year for all claims paid under the Products & Completed Operations coverage.

The Products & Completed Operations Aggregate may be included within the General Aggregate. This may be possible on certain non-standard forms.

Limits - Each Occurrence

Describes the maximum limit(s) available as a combined limit for bodily injury and property damage claims resulting from a single occurrence.

Limits - Personal and Advertising Injury

Typically covers items such as Term Paper false arrest, detention or imprisonment, malicious prosecution, wrongful eviction, invasion of privacy, libel, slander, use of another's advertising ideas, infringing on copyrights in your advertisement.

The policy should indicate if coverage includes or excludes mental anguish, discrminaiton, humiliation, or mental injury.

Limits - Damage to Rented Premises (each occurrence)

This coverage may or may not be limited to certain perils, such as fire. (referred to as "fire damage legal" liability coverage.)

If a fire occurred in a premises you rent, it is possible the building owner could seek recourse. "Damage to Rented Premises" coverage would protect you if you were found to be legally liable. A review of your lease agreements can determine the need for this protection. If a potential liability exists coverage for should be included for at least fire, explosion and water damage. The need to insure against other perils should also be considered.

Note, older or more restrictive policy forms may refer to this coverage as "Fire Legal Liability".

Limits - Medical Expenses (any one person)

This coverage is not liability insurance as it will pay regardless of fault or legal liability. It can useful in providing a quick payment for medical expenses associated with minor injuries.

Coverage can be excluded if not wanted. Many insureds feel this coverage may give adjusters an undesirable latitude in quickly paying small nuisance claims.

Limits - Employee Benefits Liability

This typically covers an employer for claims arising out of errors or omissions in the handling of records, employee enrollments or terminations, or interpretation of employee benefits.

Note, this coverage is typically provided on a claims made basis and most agents passively allow the retro date to move forward every year. Also, policies can vary widely on this coverage. Is the definition of covered plans limiting or restrictive in any way?

The policy should state if coverage is provided on an occurrence basis. This will create a gap in coverage if the prior coverage was claims made.

Beware, this coverage does not extend to discretionary acts of plans fiduciaries, such as negligent decisions. Such exposures are typically provided by Fiduciary Liability Insurance.