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Definition: Aggregate Product Liability Limit
Aggregate Product Liability Limit is the maximum coverage limit that the insurance company will provide to the policyholder in the specified period for all losses other than those arising from specified exposure. Thus aggregate product liability limit is the dollar amount which is paid to the insurance holder in case of damage to the insured entity. The insurance period may range from a year to the lifetime of the underlying. However the amount paid as coverage i.e. aggregate product liability limit is fixed for each insurance product. Any claims above the specified amount are not entertained. Also irrespective of the number of claims madde in a particular period to the insurance company, the product liability limit will not change.
For Example: If an individual has a health insurance of Rs. 40,000 for a year in case of damage, he can claim only a Rs. 40,000 even if damage caused him an expenditure of more than 40K. Also if damage happens after one year, insurance company is not liable to any coverage.
Similarly, even if the number of claims made to the insurance company in a particular period reaches several thousands in number, they cannot reduce the specified exposure.
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