Split limits

Split limits are a type of policy limit, commonly seen in commercial auto insurance, that designates the maximum amount an insurer will pay for three different parts of a claim.

These limits are typically expressed as three numbers that represent the most money your policy will pay for bodily injury per person, bodily injury per accident, and property damage per accident.

Split limits are written as three numbers separated by slashes, with each number representing a specific coverage cap. For example, if your commercial auto policy has split limits of 100/300/100, your policy will provide:

• $100,000 bodily injury coverage per person
• $300,000 bodily injury coverage per accident
• $100,000 property damage coverage per accident

Let's say you run a red light in your company car and hit another vehicle, injuring two people and damaging their car. Your insurer will pay up to $100,000 for each person's medical bills, $300,000 total for all bodily injury liability from the accident, and up to $100,000 to repair or replace the other vehicle.

Since these are separate coverage caps, unused money in one category doesn't carry over. If a policy pays less than its bodily injury limit on a claim, you can't transfer the untouched funds to the property damage bucket, or vice versa.

25/50/25 is an example of split liability limits, not a universal insurance requirement. Like other split limits, the three numbers represent separate coverage caps:

• $25,000 bodily injury per person
• $50,000 bodily injury per accident
• $25,000 property damage per accident

Although 25/50/25 is sometimes cited as the baseline for auto liability insurance, required minimums vary by state. You can speak to a licensed insurance agent to determine the right limits for your small business.

While a split-limit policy divides your liability coverage into three separate maximum caps, combined single limits (CSLs) combine all bodily injury and property damage losses into one coverage limit per incident.

CSLs offer greater flexibility, since funds can’t get stuck in untouched coverage categories. This can be especially beneficial for severe injury or property damage claims and can make it easier to track your total coverage.

Here’s how split limits and combined single limits compare:

Split limits are most commonly found in commercial auto policies. If your business owns or regularly uses vehicles for work, understanding how split limits work can help you determine whether your policy offers enough protection.

Other business liability policies use different coverage structures entirely. For instance, general liability insurance typically has a per-occurrence limit and an aggregate limit, with a common structure of a $1 million per-occurrence limit and a $2 million aggregate limit.

Businesses that rely on trucks, cars, and delivery vans to run their operations may need a commercial auto policy with split limits. This can include:

• Contractors and construction businesses driving to jobsites
• Landscapers transporting equipment to client locations
• Photographers traveling to venues and studios
• Cleaning services driving company vehicles to customer locations
• Independent contractors using vehicles to run work errands

If you or an employee causes an accident while driving for work purposes, auto liability coverage will pay for third-party bodily injuries and property damage, based on the policy’s split limits.

Some businesses may opt for combined single limits over split limits if a contract requires CSL or if the business has more complex auto coverage needs.

When it comes to small business coverage, both split limits and combined single limits can offer sufficient coverage. The right structure just depends on your business's unique risks, type of vehicles, contractual requirements, and state laws.

Split limit coverage might be a good fit if your business:

• Has straightforward commercial auto needs
• Operates a small number of vehicles
• Prefers clearly defined coverage limits for bodily injury and property damage
• Can satisfy state requirements and contractual obligations with split limits

A combined single limit policy may be a solid option when:

• A contract or client requires a specific CSL
• The business wants more flexibility in how coverage limits apply
• There’s substantially more commercial auto exposure 
• Commercial auto needs are more complex, such as operating a larger fleet

When determining the right commercial auto policy limits for your small business, there are several key factors to consider, including any state, contract, or client requirements, the number and type of vehicles you own, and how often they'll be used for business.

Additionally, you'll want to assess driver history, the types of goods or equipment transported, the potential severity of an accident, and what your business assets and financial exposure look like.

If your business needs more protection than a standard commercial auto policy can offer, a commercial umbrella policy can add a layer of coverage that'll kick in when your underlying policy limits are exhausted.

Need help determining the best liability limits for your business? Insureon makes it easy for small business owners to compare policies from top U.S. insurance carriers. Our licensed insurance agents are here to break down coverage limits, state laws, and any other questions you may have.

To get started, submit one easy online application. Once you’ve found affordable insurance coverage, you can typically begin coverage and get a certificate of insurance (COI) on the same day.