Also known, as the “annual aggregate limit” this is a provision in liability insurance contracts that limits the maximum amount of liability an insurance company will pay in a given year.For example, suppose an insured has a liability policy that pays up to $100,000 per occurrence. Without an aggregate limit of liability, the insurance company is responsible for an unlimited number of occurrences. In order to limit the exposure, the policy may state that the company will pay up to $100,000 per occurrence up to a maximum of five occurrences a year. This limits the insurance company’s maximum exposure to $500,000.
Insurance Encyclopedia
Aggregate method
A prospective benefits funding method used to calculate contributions required to secure pension benefits. No standard contribution rate is determined. Instead a modified contribution rate is calculated as that which, if paid over the expected future membership of the active members, would be sufficient, taking account of the actuarial value of assets, to provide for the benefits. The modified contribution rate is also called the recommended contribution rate.
Aggregate monitoring
System used by insurer or managing agent to record, monitor and control their total aggregate exposures by country of risk, class of business, years of exposure or other appropriate variable. For example, in the exempted classes of financial guarantee insurance Lloyd’s calls upon managing agents to run systems that enable syndicates to avoid excessive exposure to any one obligor, industrial sector, location or insured nationality, in any one obligor country. The totals are regularly monitored to ensure that any limits are not exceeded.
Aggregate mortality table
A table based on the rate of mortality according to age. No allowance is made for the duration of the insurance. Aggregate tables are used for the valuation of life contracts.
Aggregate Operations Liability
The total amount of money which the Insurer will pay under the terms of a liability Policy for claims for damages caused by the insured or his Agent in the operation of a business. It usually applies only to property damage liability.
Aggregate Products Liability
The total amount of money which the Insurance Company will pay under the terms of a liability Policy for claims which arise out of the distribution or use of the products covered by the contract.
Aggregate Products Liability Limit
Represents the amount which an insurer will pay during the term of a policy for all Product Liability Claims which it covers.
Aggregate Protective Liability
The total amount which the Insurance Company will pay under the terms of a liability Policy for claims which may arise from acts of independent contractors. This is frequent found in the construction field.
Aggregate retention
The aggregate amount of risk retained by the insured, i.e. losses up to the level that are selfinsured rather than assumed by an insurer
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An additional retention kept net by the cedant of losses otherwise recoverable from the reinsurer. There are two retentions in a program having an aggregate retention. The first retention applies to each risk or occurrence. The second, or aggregate retention, applies to amounts that would normally be recoverable from the reinsurer. Only after the aggregate retention is exceeded can the cedant recover from the reinsurer.
Aggregate stop loss
Agreement in a managed care plan to relieve the amount of liability for insurance claims that are in excess of the amount anticipated for the contract year. Also see stop loss.