In a commercial general liability policy, which factor restricts the amount payable in the event of a loss?

In a commercial general liability policy, which factor restricts the amount payable in the event of a loss?

• A. Deductible
• B. Coinsurance
• C. Limit on the Policy
• D. Exclusion Clause

Answer: (C)

The amount payable under a commercial general liability policy is limited by the policy’s limits. These limits cap how much the insurer will pay for a single occurrence and for all occurrences during the policy period (per-occurrence and aggregate limits). If a claim or total losses exceed those limits, the excess isn’t paid by the insurer, so the limit on the policy is what restricts the payment amount. Other elements don’t set the payment cap in the same way: deductibles reduce payments in some forms, but many CGL forms have no deductible; coinsurance is a concept from property insurance; and an exclusion clause limits coverage for certain risks rather than determining the total payable amount.

The amount payable under a commercial general liability policy is limited by the policy’s limits. These limits cap how much the insurer will pay for a single occurrence and for all occurrences during the policy period (per-occurrence and aggregate limits). If a claim or total losses exceed those limits, the excess isn’t paid by the insurer, so the limit on the policy is what restricts the payment amount. Other elements don’t set the payment cap in the same way: deductibles reduce payments in some forms, but many CGL forms have no deductible; coinsurance is a concept from property insurance; and an exclusion clause limits coverage for certain risks rather than determining the total payable amount.