Short answer
In 1M/1M vs. 1M/2M professional liability, the first number is the limit per covered claim and the second is the total aggregate for the policy period. A 1M/1M policy generally provides up to $1 million per claim and $1 million total. A 1M/2M policy generally provides up to $1 million per claim and up to $2 million total across all covered claims. The aggregate does not raise the limit for any single claim.
What does 1M/1M mean in professional liability?
A 1M/1M limit generally means the policy pays up to $1 million for any one covered claim. It also pays no more than $1 million in total for all covered claims during the policy period.
If a firm has one covered claim, the per-claim and aggregate limits work the same way. The difference shows up when a firm has more than one claim in the same year.
What does 1M/2M mean in professional liability?
A 1M/2M limit generally means up to $1 million per covered claim and up to $2 million total for all covered claims in the policy period.
The higher aggregate gives the firm more total protection if several claims occur. A single claim is still capped at the per-claim limit.
How do per-claim and aggregate limits work together?
Per claim versus aggregate
The per-claim limit caps what the policy pays for one claim. The aggregate caps what the policy pays across all claims in the period. Once the aggregate is used up, the policy generally pays nothing further for that period.
Why a $2M aggregate is not $2M for one claim
A common mistake is reading 1M/2M as $2 million available for a single claim. The most the policy would pay for one covered claim is still $1 million.
How defense costs may affect the limits
Some policies include defense costs within the limit, so legal fees reduce what remains for settlements or judgments. Others pay defense costs in addition to the limit. The policy wording controls, so check how your form handles them.
Real-world example
A structural engineering firm carries a 1M/2M policy. During one policy year, two unrelated clients make covered claims.
The first claim resolves at $800,000. The second claim resolves at $1.4 million.
The policy would generally pay up to $1 million on the second claim, since that is the per-claim limit. Combined payments of $1.8 million stay under the $2 million aggregate, but the second claim is still capped at $1 million. If defense costs erode the limits under the policy form, the amounts available could be lower.
What to check on your limits and certificate
- What the contract requires: per claim, aggregate, or both
- The per-claim and aggregate limits on your policy
- Whether defense costs reduce the limits or sit outside them
- How the limits appear on your certificate of insurance
- Whether the policy period matches the contract requirements
- Whether any claims already reported have reduced the aggregate
Certificates usually list professional liability limits as “each claim” and “aggregate,” often shown as two figures. The certificate summarizes the policy, but the policy itself controls.
Common mistakes when reading limits
- Assuming the aggregate applies to a single claim
- Ignoring how defense costs affect the available limit
- Assuming a certificate replaces reading the policy
- Overlooking contracts that name both a per-claim and an aggregate requirement
- Forgetting that earlier claims may have already used part of the aggregate
Related questions
If my certificate shows 1M/2M, can I satisfy a contract requiring $2M per claim?
Generally, no. Those limits show $1 million per claim, so they would not meet a $2 million per-claim requirement on their own. Some contracts allow excess or umbrella coverage to help satisfy limits, but the contract language and the actual policies need review.
Why do contracts specify both per-claim and aggregate limits?
The per-claim limit sets the most available for one event. The aggregate sets the total across the period. Clients often want both to reflect their risk tolerance.
Does a higher aggregate cost more?
It often does, though the increase varies by carrier and policy structure.
Can I increase my limits midterm?
Sometimes, depending on the carrier and policy. Ask before assuming it is possible.