What is meant by "aggregate limit" in a liability policy?

An aggregate limit in a liability policy refers to the maximum amount an insurer is obligated to pay for all claims that occur during a specific coverage term, typically a policy year. This limit encompasses the total of all claims, regardless of their individual amounts or the number of claims submitted.

For instance, if a policy has an aggregate limit of $1,000,000, that is the maximum payout the insurer will provide for all liabilities combined during the term. Once this limit is reached, the insurer will not cover any additional claims, which underscores its importance for both insured individuals and insurers in managing potential liability risks.

The other options do not accurately capture the definition of "aggregate limit." While the total number of claims allowed per year implies a cap on claim submissions, it does not reflect the financial cap imposed by the aggregate limit. Similarly, the minimum claim amount required pertains to a different concept of deductibles or retentions, and the total value of the insured property relates to property coverage, not liability insurance.