What is the term for the maximum liability limit an insurer holds for a series of losses within a policy term?

The term for the maximum liability limit that an insurer holds for a series of losses within a policy term is the Aggregate Limit. This limit represents the total amount the insurer will pay for all claims during the specified coverage period, regardless of the number of individual claims made. The Aggregate Limit is crucial for policyholders to understand, as it ensures that they know the extent of coverage available to them for multiple losses, which can be especially relevant in situations where numerous claims arise, such as in liability insurance.

This limit applies collectively to various claims, which means that once the aggregate cap is reached, no further payouts will occur, even if additional claims are reported. Understanding this concept helps both insurers and insured parties manage risks and expectations regarding potential payouts.