What is a general aggregate limit?

The general aggregate limit is the ceiling on your GL policy's total payouts for a policy year, and understanding how it works is essential for tree service companies that face multiple claim exposures across dozens or hundreds of job sites annually.

A standard CGL policy has several limits that work together. The per-occurrence limit is the maximum the policy pays for any single occurrence (typically $1,000,000). The general aggregate is the maximum total the policy pays for all occurrences combined during the policy period (typically $2,000,000), excluding products-completed operations claims, which have their own separate aggregate. Personal and advertising injury, damage to rented premises, and medical payments all fall under and erode the general aggregate.

Here is how it works in practice. Your tree service has a $1M per-occurrence / $2M general aggregate policy. In January, a crew damages a client's roof — $400,000 claim. In April, a falling branch injures a pedestrian — $600,000 claim. In August, equipment rolls into a parked car — $300,000 claim. Each claim is within the $1M per-occurrence limit, but the total ($1.3 million) has reduced your remaining general aggregate to $700,000 for the rest of the policy year. One more significant claim could exhaust your aggregate entirely, leaving you without GL coverage for the final months of the policy.

For tree service companies, aggregate erosion is a real risk because of the volume of job sites, the physical nature of the work, and the frequency of property damage claims. This is one of the primary reasons umbrella and excess liability policies exist. An umbrella policy sits above your GL (and auto and employers' liability) and provides additional limits — typically $1 million to $10 million — that drop down when underlying aggregates are exhausted. Without an umbrella, once your $2 million aggregate is gone, every subsequent claim comes directly out of your business assets.

Some contracts — particularly with municipalities and large commercial clients — require a per-project or per-location aggregate endorsement (ISO CG 25 03 or CG 25 04). This endorsement provides a separate aggregate for each project or location, preventing claims from one job site from eroding the aggregate available for other projects. If you perform work at multiple locations simultaneously, this endorsement provides significantly better protection and may be required by contract.

Monitor your aggregate throughout the policy year. Your broker can request a loss run mid-term to check how much aggregate remains. If you see significant erosion, discuss options with your broker — including purchasing an aggregate buyback (if available), increasing limits at renewal, or adding a per-project aggregate endorsement. Running out of aggregate mid-year is a preventable crisis that proper monitoring eliminates.