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📌 '''Per-occurrence limit''' is the maximum amount an [[Definition:Insurance carrier | insurance carrier]] will pay for all [[Definition:Claim | claims]] arising out of a single [[Definition:Occurrence | occurrence]] or event under an [[Definition:Insurance policy | insurance policy]]. It differs from a [[Definition:Per-claim limit | per-claim limit]], which caps each individual claimant's recovery, and from the [[Definition:Aggregate limit | aggregate limit]], which caps total payouts over the entire policy period. In [[Definition:Liability insurance | liability insurance]], [[Definition:Commercial property insurance | commercial property]], and many [[Definition:Reinsurance | reinsurance]] contracts, this limit is a primary structural element that determines how much risk the insurer retains per event.

⚙️ When an event—such as a factory explosion, a product recall, or a multi-vehicle accident—gives rise to multiple [[Definition:Bodily injury | bodily injury]] or [[Definition:Property damage | property damage]] claims, the insurer totals all covered damages from that single occurrence and applies the per-occurrence limit as a ceiling. If the policy carries a $1 million per-occurrence limit and a $3 million [[Definition:Aggregate limit | aggregate limit]], and one occurrence generates $1.5 million in losses, the carrier pays only $1 million for that event. The remaining $500,000 becomes the [[Definition:Policyholder | policyholder's]] responsibility, unless [[Definition:Umbrella insurance | umbrella]] or [[Definition:Excess insurance | excess]] coverage responds above the primary layer. A key underwriting consideration is how "occurrence" is defined—policy language and case law determine whether related incidents constitute one occurrence or several, a distinction that can dramatically shift the financial outcome for both insurer and insured.

🔍 Getting the per-occurrence limit right is central to effective [[Definition:Risk management | risk management]] for both buyers and sellers of insurance. [[Definition:Policyholder | Policyholders]] who underestimate their exposure may find themselves bearing significant uninsured losses after a major event, while [[Definition:Underwriting | underwriters]] who set limits too generously relative to [[Definition:Premium | premium]] collected risk adverse [[Definition:Loss ratio (L/R) | loss ratios]]. In [[Definition:Reinsurance | reinsurance]] treaties, particularly [[Definition:Excess of loss reinsurance | excess of loss]] structures, the per-occurrence limit of the underlying policy influences how losses flow through to the reinsurer and shapes [[Definition:Pricing | pricing]] models. Disputes over whether multiple claims stem from a single occurrence or from separate ones remain among the most litigated issues in insurance law, underscoring the practical weight this seemingly straightforward limit carries.

'''Related concepts'''
{{Div col|colwidth=20em}}
* [[Definition:Aggregate limit]]
* [[Definition:Occurrence]]
* [[Definition:Policy limit]]
* [[Definition:Excess insurance]]
* [[Definition:Deductible]]
* [[Definition:Umbrella insurance]]
{{Div col end}}

Definition:Per-occurrence limit - Revision history

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