On a liquor liability policy, the per-occurrence limit, usually called the each common cause limit, is the most the insurer will pay for all injury and damage arising from one incident or one cause, such as over-serving a single guest who then causes a crash. The aggregate limit is the most the policy will pay for all covered liquor claims combined during the policy period.
These two numbers appear on every liquor liability declarations page, and together they decide whether a bad night, or a bad year, stays within your coverage. This page explains how each limit works, how landlords and lenders set requirements, and what to check before you accept a quote.
Each common cause vs aggregate, explained
- Each common cause (per occurrence) — the standard ISO liquor liability form, CG 00 33, uses this term. All injuries that trace back to the same act of selling or serving alcohol are treated as one common cause, no matter how many people were hurt.
- Aggregate — the total the policy will pay for all common causes during the policy term. Every paid claim reduces what is left for the rest of the year.
- Relationship between them — the aggregate is typically equal to or higher than the each common cause limit, so one catastrophic incident can use up the per-cause limit while leaving some aggregate for other claims.
- Separate from general liability — liquor limits sit on their own policy or endorsement and do not share the general liability aggregate, unless your policy is specifically written that way.
How to read the limits on your own policy, step by step
- Find the liquor liability declarations page or endorsement schedule and note both the each common cause and aggregate limits.
- Check whether defense costs are paid in addition to the limits or inside them. Some liquor policies, especially in specialty markets, reduce your limits with every dollar spent on attorneys.
- Look for sublimits, most often for assault and battery, which can cap fight-related claims well below the main limit.
- Confirm whether the policy covers all your locations and any off-premises catering or delivery sales.
- Verify that your umbrella schedules the liquor policy as underlying coverage, so the umbrella extends above it.
- Compare everything to your lease and franchise requirements, which may specify minimum liquor limits and additional insured status.
Who sets your liquor liability limits
Landlords commonly require liquor limits at least equal to your general liability limits, with the landlord named as additional insured. Franchisors of bar-and-grill concepts set minimums in the franchise agreement. Some alcohol regulators or local licensing offices ask for evidence of liquor coverage as part of licensing. Beyond those minimums, owners weigh dram shop exposure in their state, the share of revenue from alcohol, hours, and entertainment. Our guide to sizing liability limits walks through that decision.
Two scenarios that show the difference
One common cause, several claimants. A Florida sports bar keeps serving a guest during a late game. He leaves, runs a red light, and injures two people in another car. Both injured people file claims, but because both arise from the same service of alcohol to the same guest, the claims are handled under one each common cause limit. If the combined settlement and, where applicable, defense costs exceed that limit, the umbrella or the bar itself must cover the rest. See liquor liability insurance in Florida.
Separate causes in one policy year. A Connecticut brewpub faces a claim in the spring from an over-served patron who fell down a stairway, and another in the fall after a guest drove away intoxicated. Each is a separate common cause with its own per-cause limit, but both payments reduce the same aggregate. By the end of the term, less aggregate is available for a third claim. See liquor liability insurance in Connecticut.
Mistakes owners make with liquor limits
- Assuming general liability limits also cover alcohol-related claims.
- Missing a defense-within-limits clause that shrinks real protection.
- Overlooking an assault and battery sublimit in a late-night venue.
- Buying an umbrella that does not list the liquor policy underneath it.
- Sharing one aggregate across several bars without reviewing whether per-location limits are available.
Comparing liquor liability quotes side by side
Provident Financial Group compares multiple carriers on one application and lays out each common cause limits, aggregates, defense terms, and sublimits in a side-by-side view, so you are not comparing price alone. After binding, you get live certificates of insurance for landlords and franchisors. Call (866) 964-6660.
Frequently asked questions
Is each common cause the same as per occurrence?
In practice, yes. Liquor liability forms use each common cause to group all injuries arising from the same sale or service of alcohol under one limit.
Do defense costs reduce my liquor liability limits?
It depends on the policy. Some pay defense in addition to limits, while others include defense within limits. Check the coverage form before you buy.
Can an umbrella policy sit on top of liquor liability?
Yes, if the umbrella lists the liquor policy as underlying insurance and does not exclude liquor liability.
Does the liquor liability aggregate reset?
Yes, at each new policy term. Claims paid during the current term reduce the remaining aggregate until renewal.
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