Commercial Liability Insurance policy has the declaration of different limits. Even though the limits are separate, they stand inter-connected and hence knowledge of the same becomes vital. Insurance holder should understand how the limits of liability apply in the commercial general liability policy.

List of Commercial liability insurance includes:

  • General Aggregate Limit
  • Products/Completed Operations Aggregate
  • Personal and Advertising Injury Limit
  • Each Occurrence Limit
  • Damage to Premises Rented to You Limit
  • Medical expense Limit

General Aggregate Limit:

General Aggregate Limit is the most the insurer will pay for all sums as damages because of bodily injury, property damage. It does not cover for the sum paid as damages because of bodily injury or property damage included within the products-completed operations hazard.

Read More: What is covered under Commercial Liability Insurance?

Products-Completed Operations Aggregate Limit:

This limit is the most the insurer will pay for sums as damages because of bodily injury or property damage included within the products-completed operations hazard during the policy period.

Personal and Advertising Injury Limit:

This limit is the most the insurer will pay for sums as offenses of personal and advertising which were included in the Personal and Advertising Injury Limit during the policy period.

Each Occurrence Limit:

Each Occurrence limit is the most the insurer must pay for the sum of all damages for bodily injury and property damage arising out of any one occurrence.

Damage to Premises Rented to You Limit:

Coverage for Damage to Premises Rented to You is not provided by a specific coverage grant but rather by exceptions to certain exclusions found in bodily injury and property damage.

Example of the exclusions are:

  • Coverage for property damage to premises and its contents rented by the named insured and he is legally obligated to pay for such damage due to any cause except
  • Coverage for damage only to the premises if an insured is legally obligated to pay for the property damage, but only if the damage is caused by fire.

Medical Expense Limit

Medical Expense Limit obligates the insurer to pay reasonable medical expenses for bodily injury, caused by an accident, without regard to fault.

Case: 1

Jubilee Circus Inc had been entertaining audience all over India since last two decades. They were known for putting up some extravagant and mind-dazzling performances. Their shows were not just limited to a single state, but they traveled to different Indian states and always performed above people’s expectations.

Read More: How to file a claim under Commercial Liability Insurance?

Considering the damages and accidents that can happen at a performance, Jubilee Circus Inc purchased Commercial Liability Insurance from an Insurance company. Following were the limits of liability provided to Jubilee Circus Inc, under Commercial Liability Insurance policy.

Amount in Rupees

Limits of Insurance for Jubilee Circus Inc
10,00,000

General Aggregate Limit

10,00,000

Products-Completed Operations Aggregate Limit
5,00,000

Personal and Advertising Injury Limit (For any one person or organization

5,00,000

Each occurrence limit
2,50,000

Coverage for damage to premises rented to you Limit (For one premise)

50,000

Medical Expense (For one person)

 

During its show in Kolkata, the tent from one side collapsed and injured 10 people. Along with this tent mishap, the fire-eater caused fire to one of the aircraft hanger which was rented by Jubilee Circus Inc.

Due to the insurance policy, following limits of insurance in Commercial Liability Insurance was taken care of.

  • Medical expense of 10 injured people

The insurance company paid 5 lakhs rupees for the ten patrons medical expenses based on the following calculations:

5,00,000 (10 persons *Rupees50,000 each person) (Based on medical expense Limit)

  • Damage to rented aircraft hanger

Jubilee Circus Inc was found legally obligated to pay for the damage to the rented aircraft hanger. The most amount the Insurance company paid for the damage to the hangar was:

  • 2,50,000 rupees (The damage to premises rented to you Limit)

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