Final answer:
The separate aggregate limit under CLG refers to a type of insurance policy called a Commercial General Liability (CGL) policy.
Step-by-step explanation:
The separate aggregate limit under CLG refers to a type of insurance policy called a Commercial General Liability (CGL) policy. In a CGL policy, there are two types of aggregate limits: a general aggregate limit and a separate aggregate limit. The general aggregate limit represents the maximum amount the insurer will pay for all claims during the policy period, while the separate aggregate limit is the maximum amount that will be paid for certain specified coverages.
For example, let's say a company has a CGL policy with a $1 million general aggregate limit and a $500,000 separate aggregate limit for Products-Completed Operations. If a claim arises from the company's day-to-day operations, it would be subject to the $1 million general aggregate limit. However, if a claim arises from the company's products or completed operations, it would be subject to the $500,000 separate aggregate limit.
The term “separate aggregate limit” under a Commercial General Liability (CLG) policy refers to the maximum amount an insurance company will pay for all covered losses within a policy period. This limit is distinct from the per occurrence limit, which is the maximum amount the insurer will pay for a single claim.
In a CLG policy, certain coverages, such as “Products and Completed Operations” may have a separate aggregate limit which exclusively applies to them, meaning the total payout for all claims under this particular coverage cannot exceed this specified amount during the policy term. This is crucial in risk management, as it ensures that the policyholder has a clear understanding of the maximum coverage available for specific types of claims.