Per-occurrence limit

Many small business insurance policies limit the amount of money they’ll pay for a single incident. This amount or cap 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.

Per-occurrence limits are necessary for two reasons:

• 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.

The aggregate limit is the maximum amount of money an insurer will pay you for multiple claims during the policy period.

In short, claims-made policies must be active when an incident is reported to collect on a claim. But if you have an occurrence policy, you can collect on a claim even after your policy expires if the incident occurred while you were covered.

An occurrence policy such as general liability insurance covers losses that take place during a specific coverage period, regardless of when the claim occurs. To collect on a claims-made policy like errors and omissions insurance, your policy must be active both when the incident occurred and when you made the claim.

Insureon helps small business owners compare business insurance quotes with one easy online application. Start an application today to determine the right amount of protection for your needs.