How will ABC Masonry, Inc. handle a claim for $150,000 in property damage under their aggregate liability policy?

In this scenario, the correct handling of the $150,000 claim for property damage under an aggregate liability policy would involve the insurer covering a portion of the claim, specifically $100,000, while ABC Masonry, Inc. would be responsible for paying the remaining amount.

An aggregate liability policy typically has limits that restrict the total amount an insurer will pay for claims within a specified period. In the case presented, this limit may be set at $100,000. Consequently, once the claim is filed, the insurer covers its maximum obligation, and any amount exceeding that limit is the responsibility of ABC Masonry, Inc. This situation exemplifies how aggregate policies can function, where there is a clear division of financial responsibility based on the terms and conditions outlined in the policy.

Understanding these limitations allows companies like ABC Masonry to anticipate potential out-of-pocket costs when considering coverage options and the implications of their liability insurance.