Los Angeles Claims Adjuster Property and Causality Practice Exam

What type of limit would apply to all claims in a single incident under CGL?

1. Aggregate Limit

2. General Limit

3. Per Occurrence Limit

4. Specific Incident Limit

The correct answer is: Per Occurrence Limit

The appropriate limit that applies to all claims in a single incident under a Commercial General Liability (CGL) policy is the Per Occurrence Limit. This limit establishes the maximum amount that an insurer will pay for all claims arising from a single occurrence or event. In practical terms, if multiple claims are made due to one incident, the Per Occurrence Limit caps the total payout the insurer is liable for in response to that incident. This is crucial for insurers as it helps manage their risk and potential liability exposure. In contrast, the other terms serve different purposes. An Aggregate Limit refers to the total amount an insurer will pay for all claims over a specified period, usually one policy year, rather than per incident. General Limit is not a standard term in insurance and may confuse understanding. Specific Incident Limit is also not a conventional term used in CGL policies, as limits are typically categorized as either Per Occurrence or Aggregate. Thus, the Per Occurrence Limit is the most accurate choice for understanding how claims are managed under CGL for incidents.