Insurance Comparison
Per-Occurrence vs Aggregate Limits Explained
Understand the difference between per-occurrence and aggregate limits on your tree service insurance policy and how they affect your total available coverage.
| Dimension | Per-Occurrence Limit | Aggregate Limit |
|---|---|---|
| Definition | The maximum amount the insurer will pay for any single claim or incident. | The maximum total amount the insurer will pay for all claims combined during the policy period. |
| Standard Tree Service Limits | $1,000,000 per occurrence is the most common limit for tree service GL policies. | $2,000,000 aggregate is the standard — meaning 2x the per-occurrence limit for all claims in the year. |
| How It Works — Example 1 | A tree falls on a client's roof causing $800,000 in damage. The per-occurrence limit of $1M covers the full claim. | After paying the $800K claim, only $1,200,000 remains in the aggregate for the rest of the policy period. |
| How It Works — Example 2 | Three separate incidents each cause $500,000 in damage. Each is within the $1M per-occurrence limit. | The three claims total $1.5M. With a $2M aggregate, $500,000 remains for additional claims during the policy year. |
| What Happens When Limits Are Exhausted | Any single claim exceeding the per-occurrence limit is your responsibility (unless you have umbrella/excess). | Once the aggregate is exhausted, the policy pays nothing more for the remainder of the year — regardless of per-occurrence limits. |
| Relationship | Per-occurrence limits apply to each individual claim independently. | The aggregate is the ceiling that caps total payouts, even if individual claims are within per-occurrence limits. |
| Impact on COI Requirements | Most clients require minimum $1M per occurrence on your COI. | Most clients require minimum $2M aggregate on your COI. Some require higher aggregates for large projects. |
| Products-Completed Operations | The per-occurrence limit applies to each products-completed operations claim individually. | Products-completed operations often has its own separate aggregate (typically equal to the general aggregate). |
| How to Increase | Increasing per-occurrence limits increases your premium significantly. Going from $1M to $2M per occurrence can add 30-50%. | Aggregate limits typically move in proportion to per-occurrence limits. An umbrella policy effectively increases both. |
| Risk Management Tip | Choose per-occurrence limits based on the maximum realistic single-loss scenario — a tree on a house, a truck in an accident. | Monitor aggregate erosion throughout the year. If you have multiple claims early in the year, your remaining coverage may be inadequate. |
Definition
Per-Occurrence Limit
The maximum amount the insurer will pay for any single claim or incident.
Aggregate Limit
The maximum total amount the insurer will pay for all claims combined during the policy period.
Standard Tree Service Limits
Per-Occurrence Limit
$1,000,000 per occurrence is the most common limit for tree service GL policies.
Aggregate Limit
$2,000,000 aggregate is the standard — meaning 2x the per-occurrence limit for all claims in the year.
How It Works — Example 1
Per-Occurrence Limit
A tree falls on a client's roof causing $800,000 in damage. The per-occurrence limit of $1M covers the full claim.
Aggregate Limit
After paying the $800K claim, only $1,200,000 remains in the aggregate for the rest of the policy period.
How It Works — Example 2
Per-Occurrence Limit
Three separate incidents each cause $500,000 in damage. Each is within the $1M per-occurrence limit.
Aggregate Limit
The three claims total $1.5M. With a $2M aggregate, $500,000 remains for additional claims during the policy year.
What Happens When Limits Are Exhausted
Per-Occurrence Limit
Any single claim exceeding the per-occurrence limit is your responsibility (unless you have umbrella/excess).
Aggregate Limit
Once the aggregate is exhausted, the policy pays nothing more for the remainder of the year — regardless of per-occurrence limits.
Relationship
Per-Occurrence Limit
Per-occurrence limits apply to each individual claim independently.
Aggregate Limit
The aggregate is the ceiling that caps total payouts, even if individual claims are within per-occurrence limits.
Impact on COI Requirements
Per-Occurrence Limit
Most clients require minimum $1M per occurrence on your COI.
Aggregate Limit
Most clients require minimum $2M aggregate on your COI. Some require higher aggregates for large projects.
Products-Completed Operations
Per-Occurrence Limit
The per-occurrence limit applies to each products-completed operations claim individually.
Aggregate Limit
Products-completed operations often has its own separate aggregate (typically equal to the general aggregate).
How to Increase
Per-Occurrence Limit
Increasing per-occurrence limits increases your premium significantly. Going from $1M to $2M per occurrence can add 30-50%.
Aggregate Limit
Aggregate limits typically move in proportion to per-occurrence limits. An umbrella policy effectively increases both.
Risk Management Tip
Per-Occurrence Limit
Choose per-occurrence limits based on the maximum realistic single-loss scenario — a tree on a house, a truck in an accident.
Aggregate Limit
Monitor aggregate erosion throughout the year. If you have multiple claims early in the year, your remaining coverage may be inadequate.
What Tree Service Companies Need to Know
Every tree service insurance policy has two key limits that determine your total protection: the per-occurrence limit and the aggregate limit. Understanding how these interact is critical, because a common and dangerous mistake is assuming that your per-occurrence limit is available for every claim throughout the year — it is, but only until the aggregate runs out.
The per-occurrence limit is the maximum your insurer will pay for any single incident. If you carry $1 million per occurrence and a tree your crew is removing falls on a neighbor's house causing $750,000 in damage, the policy covers the full amount. If the same incident caused $1.3 million in damage, the policy pays $1 million and you are responsible for the remaining $300,000 (unless you have umbrella coverage).
The aggregate limit is your total coverage budget for the entire policy year. A standard $1M/$2M policy means $1 million per occurrence and $2 million aggregate. If you have two major claims of $900,000 each, the aggregate is nearly exhausted at $1.8 million. Any additional claim during that policy year would only have $200,000 remaining in aggregate — even though the per-occurrence limit is $1 million.
This is why umbrella coverage is so important for tree services. Tree work is inherently high-risk, and multiple claims in a single year are not uncommon. Storm seasons can generate multiple property damage claims in rapid succession. An umbrella policy provides additional limits above both your per-occurrence and aggregate limits, ensuring that a bad year does not leave you unprotected. If your company performs more than 500 jobs per year or works in storm-prone areas, consider carrying aggregate limits of $3 million or higher, or add an umbrella policy of $1-$5 million.
Frequently Asked Questions
What happens if my aggregate limit is exhausted mid-year?
Your policy will not pay any additional claims for the remainder of the policy period. You would be personally liable for any new claims unless you have umbrella or excess coverage, or purchase an aggregate reinstatement endorsement.
Can I buy more aggregate without increasing my per-occurrence limit?
Some carriers offer aggregate-only increases or aggregate reinstatement endorsements. However, most standard policies tie aggregate to per-occurrence limits at a 2:1 ratio. An umbrella is usually the most cost-effective way to increase your total limits.
Does my aggregate reset at renewal?
Yes. When your policy renews at the end of the policy period (usually 12 months), your aggregate limit resets to the full amount. Claims from the prior period do not carry over.
Is products-completed operations aggregate separate from the general aggregate?
Yes, on most GL policies. The products-completed operations aggregate is a separate bucket that covers claims arising from completed work. This is important for tree services because property damage from a completed job (e.g., delayed root damage) uses this separate aggregate.
What is an aggregate reinstatement endorsement?
This endorsement restores your aggregate limit after it is exhausted by claims — essentially giving you a second full aggregate for the remainder of the policy year. It is available from some carriers for an additional premium.
How do I know my current aggregate balance?
Your agent or carrier can provide a loss run report showing paid and reserved claims against your aggregate. Some carriers offer online portals where you can monitor your remaining aggregate in real time.