What is the sublimit in a liability policy that limits payment for claims from a single accident?

The term "per occurrence" in a liability policy refers to a sublimit that specifically restricts the amount that can be paid for claims arising from a single accident or event. This is an important feature in liability insurance because it determines the maximum payout that the insurer is obligated to pay for claims resulting from one specific incident.

For instance, if a liability policy has a per occurrence limit of $1 million, this means that for each individual accident or event, the insurer will cover up to $1 million in claims, regardless of how many claims might arise from that incident.

This concept is vital for understanding the structure of insurance coverage, as it helps both insurers and policyholders clarify the extent of coverage available for multiple claims stemming from a single incident, ensuring there’s a clear understanding of financial protection limits in various scenarios.

The other options represent different types of limits in insurance policies. An aggregate limit refers to the total amount that can be paid for all claims during a policy term, while a single limit combines liability coverage for both bodily injury and property damage into one total limit. The per person limit specifies the maximum payout for individual injury claims, particularly in personal auto policies.