An insured had a CGL policy with liits of $100K each occurrence BI & PD, $100K Personal and Advertising Injury, $300K General Aggregate, $300K Products Aggregate, $5K Medical Payments & $50K Fire Damage. The company paid a $60K PD claim for an occurrence during an ongoing construction job. After this claim, how much coverage is available to the insured for the next claim for BI or PD? ANSWER is $100K each occurrence limits; $240K General Aggregate. If this is a PD claim and it's under the $100 each occurrence limit, why wasn't it taken out of the each occurrence limit and it was taken from the General Aggregate instead?
Grisel,
There is an occurrence limit, but there is also a general aggregate limit. You have to take both limits into account.
Jan
Hi Jan,
Yes, I understand there are different limits for each but that's not my question. My question is why was it taken from the General Aggreagate limit and not the Per Occurrence limit since the $60,000 would have been covered by the Per Occurrence. Yet the $60,000 was taken out of the $300,000 General Aggregate. Was it because its an "ongoing" project and there might be more incidents? I just want to understand so I know for the next question. I don't understand why it was taken from General Agg and not Per Occurrence.
Grisel,
The amount of the loss is taken out of both limits. There is $100,000 per occurrence in the BI/PD coverage. That coverage will continue to show as $100,000 per occurrence, but the balance will be tracked in the aggregate limit.
Jan
Oh, I think I understand it now. The $100K is the per occurrence and it dictates how much is deducted from the General Aggregate but it doesn't deplete the per occurrence. If it were $100K per occurrence and $300K general aggregate with a loss of $100K, the new balance would show as $100K per occurrence and $200K for General Aggregate would be left for the remainder of the policy term. Is that correct?
That's correct.
Excellent! I thank you very much for your continued support even though I've already passed the class. As I continue to review preparing for my state exam next week, I've realized how valuable the online material is and being able to consult you with questions. Thanks again!!
You're very welcome.
Jan