What is a general aggregate limit?
A general aggregate limit is the maximum amount an insurance policy will pay in total for all covered claims during a single policy period. It sits above the per-occurrence limit—which caps any one claim—so once combined payouts reach the aggregate, the policy stops paying even if individual claims are still within the per-occurrence limit.
Total payout vs. per-claim payout
Every commercial general liability policy carries several limits, and two of them work together. The each-occurrence limit caps what the policy will pay for any single claim or event. The general aggregate limit caps what the policy will pay in total for allclaims during the entire policy period—usually one year.
A certificate that shows “$1,000,000 each occurrence / $2,000,000 general aggregate” means: no single claim is covered above $1 million, and once the policy has paid out $2 million across all claims that term, the aggregate is exhausted and the policy stops paying—even if a new claim would otherwise be within the $1 million per-occurrence limit.
Aggregate erosion: a shared limit is a moving target
Here is the risk GCs often overlook. On a standard CGL policy, the general aggregate is shared across everything the insured does— every project, for every client, during the policy term. As the policy pays claims, the remaining aggregate shrinks. This is called aggregate erosion.
That means a subcontractor’s certificate can show a $2 million aggregate while, in reality, losses on unrelated jobs have already consumed much of it. The certificate reflects the policy’s stated limit, not the amount actually left. If a claim on your project arrives after the aggregate has been drained elsewhere, there may be little or no coverage remaining.
- The aggregate is not reserved for your project—it is a common pool.
- A certificate shows the stated limit, not the eroded balance.
- A busy sub with several ongoing jobs presents more erosion risk.
The per-project aggregate endorsement
The fix for erosion is a per-project aggregate endorsement. Instead of one shared aggregate for the whole policy, this endorsement gives each project its own separate general aggregate limit, so claims on one job cannot erode the coverage available on another. The two standard ISO forms are:
- CG 25 03—Designated Construction Project(s) General Aggregate Limit.
- CG 25 04—Designated Location(s) General Aggregate Limit.
GCs request one of these so the full aggregate is genuinely available for their project. As with any endorsement, a note on the certificate is only a summary—the actual endorsement form or policy confirms a per-project aggregate is really in force.
Aggregates and completed operations
CGL policies often carry a separate aggregate for products–completed operationsclaims, distinct from the general aggregate. This matters for construction because defect claims that surface after a job is finished draw on the completed-operations aggregate. When you set requirements, look at both the general aggregate and the products–completed operations aggregate, since each protects a different slice of the exposure.
How does Wardly help?
Wardly is free COI tracking software built for general contractors. It reads each sub’s certificate of insurance, checks the each-occurrence and aggregate limits against your requirements, flags when limits fall short, and grades every certificate A–F automatically—so an underlimit or missing per-project aggregate doesn’t slip past. Compare it to myCOI and TrustLayer on the comparison hub.
Track these automatically with Wardly — free
Wardly reads each subcontractor’s ACORD 25 and checks limits, additional insured endorsements, waiver of subrogation, and primary and non-contributory language against the requirements you set, then grades every certificate A–F.
Get started freeThis is general information, not legal or insurance advice.
Related glossary terms
Commercial general liability (CGL)
The core third-party liability policy GCs require of subs, covering bodily injury and property damage from their work.
Read the definitionEndorsement
An amendment that adds, removes, or changes coverage on a policy—the actual proof behind a COI’s checkboxes.
Read the definitionCompleted operations
The coverage that responds to claims arising after a sub finishes work—critical for construction defect exposure.
Read the definitionFrequently asked questions
What is the difference between the aggregate and per-occurrence limit?
The per-occurrence limit is the most a policy pays for a single claim or event. The general aggregate limit is the most it pays in total for all claims during the whole policy period. A policy might show $1,000,000 per occurrence and $2,000,000 aggregate—meaning no one claim exceeds $1M, and all claims combined cannot exceed $2M in that term.
What is aggregate erosion?
Aggregate erosion is the reduction of the remaining aggregate limit as a policy pays claims during the term. Because a standard general aggregate is shared across all of the insured’s projects, losses on other jobs can eat into the limit—leaving less coverage available for yours, even though the certificate still shows the original figure.
What is a per-project aggregate endorsement?
A per-project aggregate endorsement (such as CG 25 03 or CG 25 04) gives each project its own separate general aggregate limit, so claims on one job do not erode the coverage available on another. GCs request it because it ensures the full aggregate is actually available for their project, not shared across the sub’s entire book of work.
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