What is the maximum limit of coverage available under a liability policy during a policy year regardless of claims?

The maximum limit of coverage available under a liability policy during a policy year, regardless of the number of claims made, is defined as the Aggregate Limit. This limit specifies the total amount the insurer will pay for all claims combined over the policy term. It effectively caps the insurer’s liability for multiple claims, ensuring both the insurer and the insured know the maximum exposure for the policy period.

This distinction is crucial because, without an Aggregate Limit, an insurer could face potentially unlimited exposure if multiple claims arise throughout the year. Understanding this term helps policyholders assess their coverage needs and manage risks effectively.

The other options represent different aspects of coverage limits. The Policy Limit refers to the overall limit of coverage provided by the policy, but it does not specifically address limits applicable per year. The Per Occurrence Limit refers to the maximum amount payable for a single event or claim, while a Sub-Limit is a specific limit that may apply to certain types of losses within the broader policy limits.