In a standard CGL policy, does a claim payment reduce the applicable aggregate limit?

In a standard Commercial General Liability (CGL) policy, the applicable aggregate limit is a cap on the total amount that the insurer will pay for all covered claims during a policy year. When a claim is paid, it does not reduce the aggregate limit; the insured still retains the full amount available under that limit for any subsequent claims that may arise within the policy period.

The reason why the aggregate limit remains intact after a claim payment is to provide ongoing protection to the insured. This design is crucial because it ensures that policyholders have access to the full coverage amounts they've purchased, allowing them to manage multiple claims with confidence throughout the policy term.

In contrast, certain other types of insurance policies, like some homeowner’s policies, may work differently in that certain claims could reduce coverage limits. However, the CGL policy's structure is specifically designed to maintain the integrity of the aggregate limit regardless of paid claims.