A CGL policy doesn’t have one limit, it has six, and two of them are aggregates: running totals that drain as claims are paid during the year. The each occurrence limit is the most paid for one accident. The general aggregate is the most paid for all of them combined, and a separate products-completed operations aggregate handles injury or damage from your finished work or products. That is why a contract asks for $1,000,000 per occurrence and $2,000,000 aggregate: the owner wants room left in the tank after someone else’s claim. In the standard ISO form the defense bill is paid on top of these limits, not out of them. Per-project and per-location endorsements give each job or site its own aggregate, and an umbrella sits above all of it.
The six limits on a CGL declarations page
Liability limits are written per occurrence (one accident or event) or in the aggregate (the whole policy term). The standard ISO commercial general liability form, CG 00 01, uses both, and Section III lists six limits, the lower ones “subject to” the aggregates above them:
- General Aggregate Limit: the most paid in the policy period for Coverage A bodily injury and property damage outside the products-completed operations hazard, Coverage B personal and advertising injury, and Coverage C medical expenses combined.
- Products-Completed Operations Aggregate Limit: a separate pot for injury or damage away from your premises arising from products that have left your hands or work you have finished. One aggregate does not drain the other.
- Each Occurrence Limit: the most paid for all damages and medical expenses from any one occurrence, however many people are hurt or make claims. Subject to whichever aggregate applies.
- Personal and Advertising Injury Limit: per person or organization, subject to the general aggregate but not the occurrence limit.
- Damage to Premises Rented to You Limit: a sublimit inside the occurrence limit, per premises, for damage to space you rent, or fire damage to space you rent or temporarily occupy with the owner’s permission.
- Medical Expense Limit: a sublimit inside the occurrence limit, per person, paid without regard to fault.
How the aggregate drains during the year
Think of the two aggregates as tanks and the occurrence limit as the spout. Each payment of damages comes out of the occurrence limit for that event and out of the applicable aggregate at the same time. The spout refills for the next event; the tank does not. Once an insurer has paid a full aggregate it owes nothing more on claims under it, and IRMI reads the form as ending the duty to defend later suits in that bucket too. The California Department of Insurance says it plainly: once claims exceed the annual aggregate, nothing more is paid for the rest of the policy period.
Limits reset for each consecutive annual period. One catch: a policy extended after issuance for less than 12 months treats the extension as part of the last period, so the aggregate does not refill. Ask for a new policy term, not a short extension.
Defense inside or outside the limits
In the standard CGL the lawyers are paid on top of the limits. Supplementary Payments says that for any claim the insurer investigates or settles, or any suit it defends, it pays all expenses it incurs, court costs taxed against you, prejudgment and postjudgment interest and bonds to release attachments, and that “these payments will not reduce the limits of insurance.” A $1,000,000 occurrence limit is $1,000,000 for damages.
That is not universal. IRMI notes that defense-within-limits wording is not the ordinary rule in general liability but shows up more often in professional liability. Even the standard CGL counts one thing inside the limit: an indemnitee’s defense costs you took on in an insured contract are deemed damages, unless the insurer takes over that defense itself. On a non-ISO form, find the sentence that says which way defense goes.
Why contracts ask for $1 million / $2 million
Contract exhibits quote two numbers: $1,000,000 each occurrence and $2,000,000 general aggregate is the pairing I see most. The City of Racine, Wisconsin’s construction contract requirement reads that way, wants coverage at least as broad as ISO form CG 00 01, and adds a condition: either the general aggregate applies separately to the project or location (ISO CG 25 03 or CG 25 04, or the insurer’s equivalent), or the aggregate, including products-completed operations, is twice the required occurrence limit. Requirements vary from owner to owner, so I read the exhibit before I shop the policy.
Owners care because one general aggregate is shared by every job you do that year: a loss on someone else’s project in March leaves the owner who signs with you in June whatever is left. Both numbers go on the certificate of insurance.
Per-project and per-location aggregates
Two ISO endorsements answer that. CG 25 03, Designated Construction Project(s) General Aggregate Limit, gives each project listed in its schedule its own general aggregate equal to the one on the declarations. Damages and medical expenses attributable only to ongoing operations at one listed project reduce that project’s aggregate and no other, and leave the declarations aggregate alone. The occurrence, rented-premises and medical expense limits still apply, under the project aggregate instead. Products-completed operations claims still come out of their own aggregate; this endorsement does not touch it. A project that is delayed, abandoned and restarted, or built off the original plans is still the same project.
CG 25 04, Designated Location(s) General Aggregate Limit, is the location counterpart. These two are what Racine’s exhibit means by a “per project” or “per location” aggregate. Underwriters ask what goes in the schedule and whether the work is ongoing operations before adding either. More on contractor insurance and general liability insurance.
Where an umbrella policy sits
A commercial umbrella is written over the primary policies: general liability, auto and employers liability. IRMI describes three jobs. It provides excess limits once an underlying policy’s limits are exhausted by paying claims. It drops down and picks up where the underlying policy left off when that policy’s aggregate is used up. And it may respond to some claims the underlying policies do not cover, subject to a self-insured retention. Racine’s exhibit asks for $5,000,000 of umbrella per occurrence in excess of employers liability, general liability, auto and professional liability. Commercial umbrella insurance.
Common questions
Does the occurrence limit reset after each claim?
Yes. The each occurrence limit applies to any one occurrence, so it is available again for the next event. What does not reset is the aggregate it draws from: every payment reduces the general or products-completed operations aggregate until the policy period ends.
Do defense costs reduce my CGL limits?
Not under the standard ISO form. Supplementary payments, including all expenses the insurer incurs on a suit it defends, are paid in addition to the limits. Professional liability policies more often go the other way, so read the form you are handed.
Why does a contract want a $2,000,000 aggregate if the job is small?
Because your aggregate is shared with every other job you do that year. The owner wants room left for its project after other claims, which is also why an exhibit like Racine’s accepts a per-project aggregate endorsement as an alternative.
What is the difference between CG 25 03 and CG 25 04?
CG 25 03 gives each designated construction project its own general aggregate; CG 25 04 is the designated-location version, and contracts name either one for a per-project or per-location aggregate. CG 25 03 does not change the products-completed operations aggregate, which has its own separate endorsement.
Does an umbrella refill my aggregate?
Not exactly. IRMI describes an umbrella as dropping down to pick up where the underlying policy leaves off once its aggregate is exhausted, and as adding excess limits above the underlying limits. The umbrella’s own limits and conditions then control.
Sources
- ISO CG 00 01 04 13 Commercial General Liability Coverage Form (public copy hosted by Cooper & Scully): Supplementary Payments and Section III, Limits of Insurance
- IRMI: how the limits apply in the CGL policy
- IRMI glossary: defense within limits
- IRMI glossary: designated construction project general aggregate limit endorsement (CG 25 03)
- ISO CG 25 03 05 09 Designated Construction Project(s) General Aggregate Limit (copy posted by New York State OGS)
- FC&S (PropertyCasualty360): CG 25 04 05 09 Designated Location(s) General Aggregate Limit (title and edition)
- IRMI glossary: umbrella liability policy
- City of Racine, Wisconsin: construction contract insurance requirements
- California Department of Insurance: Small Business Guide to Commercial Insurance
General information about commercial general liability policy limits as of October 2026, not legal or tax advice; the policy form and endorsements you are issued and the contract you signed control. Coverage depends on underwriting and the terms, conditions and exclusions of the policy actually issued.