What does the term "per occurrence" refer to in liability insurance?

The term "per occurrence" in liability insurance refers to the maximum amount that an insurer will pay for a single event or claim. This means that if an incident occurs that leads to multiple claims, the insurance policy will pay up to the per occurrence limit for each individual claim related to that specific event.

For example, if a liability policy has a per occurrence limit of $1,000,000 and a single incident results in several claims, the total payout for all claims stemming from that one incident cannot exceed $1,000,000. This is crucial for understanding how coverage is structured and how it may apply during claims.

This concept is distinct from other types of limits in insurance. For instance, "per person" refers to the maximum amount payable to each individual claimant, while "combined single limits" encompasses a single limit that applies to both bodily injury and property damage in one combined total. "Split limits" specify different amounts for bodily injury and property damage, which can complicate claims when multiple parties are involved. Understanding these differences is essential for accurately interpreting liability insurance policies.