How does the general aggregate annual limit work under commercial general liability coverage?

The general aggregate annual limit is a crucial feature of commercial general liability insurance that determines the maximum amount the insurer will pay for all covered losses during a policy year. This limit applies comprehensively to both Coverage A (which covers bodily injury and property damage) and Coverage B (which covers personal and advertising injury). Therefore, the aggregate limit encompasses the total of these coverages rather than being subdivided among them.

When claims are made under either Coverage A or Coverage B, the amounts claimed reduce the general aggregate limit. Once the limit is reached, no further claims will be paid for the policy year, regardless of the specific coverage involved. This overall cap is designed to provide both the insured and insurer with a clear understanding of financial exposure and limits of liability for the entire policy period.

The other potential choices suggest misconceptions about how the aggregate limit is structured or applied. For instance, the notion that it applies only to Coverage B, applies separately to each coverage part, or resets every other year does not align with the way the general aggregate limit functions within a commercial general liability policy.