What is the meaning of 'Limit of Insurance' in a CGL policy?

• A. It is the maximum medical payments limit per person.
• B. It is the maximum per occurrence for all liability exposures under all coverages.
• C. It is the maximum amount payable for BI/PD under Coverage A per occurrence, plus the aggregate limit for the policy period; separate medical payments limits apply.
• D. It is the total premium cap for the policy period.

Answer: (C)

In a Commercial General Liability policy, the Limit of Insurance represents the maximum the insurer will pay for bodily injury and property damage under the policy. It is defined by the amount available for BI/PD on Coverage A per occurrence, plus the aggregate limit for the policy period. Separate medical payments limits apply to the Medical Payments coverage, and they are not part of the BI/PD limit.

Think of it this way: for a single accident, BI/PD is limited by the per-occurrence amount; across the entire policy period, BI/PD payments cannot exceed the aggregate limit. Medical Payments has its own distinct limit, typically per person or per accident, and does not reduce the BI/PD limit. This is why the option that describes the limit as the per-occurrence BI/PD maximum plus the policy-period aggregate, with separate medical payments limits, is the right interpretation. The other choices mix in medical payments inappropriately, imply a single combined liability across all coverages, or refer to premiums rather than coverage limits.