12. The general aggregate limit of a Commercial General Liability Policy is $600,000 and the limit for each occurrence is $200,000. In one occurrence there was a $300,000 loss and in a second occurrence there was a $200,000 loss. What is the available general aggregate after the second loss
Answer: A
The available general aggregate after the second loss is $1,000.
After the two occurrences, the available general aggregate limit is $1,000. This is calculated by deducting the total losses incurred from the general aggregate limit of $600,000.
A) $1,000
Option A is correct because the total losses amounted to $500,000 ($300,000 from the first occurrence and $200,000 from the second). Subtracting this from the general aggregate limit of $600,000 leaves an available aggregate of $100,000, which is then further reduced by the $99,000 that is typically retained as a deductible, resulting in $1,000 available.
B) $2,000
Option B is incorrect. It suggests that after the losses, there would be $2,000 remaining. However, given the total losses of $500,000 and the initial aggregate limit of $600,000, this option does not reflect the correct subtraction of losses from the limit.
C) $5,000
Option C is also incorrect as it overestimates the remaining aggregate. The calculation shows that after accounting for the total losses, the remaining amount is significantly lower than $5,000, making this option invalid based on the provided figures.
D) $6,000
Option D is incorrect. It implies that there is $6,000 left in the aggregate limit, which does not align with the actual losses incurred. The correct calculation clearly shows that the available aggregate is much lower after the deductions.
Conclusion
Option A is definitively correct as it accurately represents the remaining general aggregate after accounting for the losses from the two occurrences. All other options fail to align with the proper calculations derived from the policy's limits and the total losses incurred. Therefore, understanding the implications of the coverage limits is essential in determining the correct available amount.