What are the minimum insurance limits per occurrence and per policy year, respectively?

What are the minimum insurance limits per occurrence and per policy year, respectively?

• A. 100,000 per occurrence; 300,000 aggregate
• B. 50,000 per occurrence; 100,000 aggregate
• C. 200,000 per occurrence; 400,000 aggregate
• D. 1,000,000 per occurrence; 2,000,000 aggregate

Answer: (A)

Understanding the limits: the per occurrence limit is the maximum the insurer will pay for a single claim arising from one event, while the aggregate limit is the total the insurer will pay for all claims in the policy period. The smallest combination that still provides this protection is 100,000 per occurrence and 300,000 aggregate, making it the minimum viable coverage referenced in the question. For example, if two separate incidents occur in the same year totaling 180,000 (one incident up to 100,000 and another up to 80,000), the per-claim cap means the first incident can be paid up to 100,000 and the second up to 80,000, totaling 180,000—still under the 300,000 annual cap. If total claims reach 350,000, the insurer would pay up to the 300,000 aggregate limit, and the remaining 50,000 would be the insured’s responsibility.

Understanding the limits: the per occurrence limit is the maximum the insurer will pay for a single claim arising from one event, while the aggregate limit is the total the insurer will pay for all claims in the policy period. The smallest combination that still provides this protection is 100,000 per occurrence and 300,000 aggregate, making it the minimum viable coverage referenced in the question. For example, if two separate incidents occur in the same year totaling 180,000 (one incident up to 100,000 and another up to 80,000), the per-claim cap means the first incident can be paid up to 100,000 and the second up to 80,000, totaling 180,000—still under the 300,000 annual cap. If total claims reach 350,000, the insurer would pay up to the 300,000 aggregate limit, and the remaining 50,000 would be the insured’s responsibility.