The maximum amount your insurer will pay for covered claims.
The policy limit (or limit of liability) is the ceiling on what your insurer will pay. Limits are typically expressed as "per occurrence" and "aggregate" (total for the policy period). Common startup limits are $1M/$2M.
Most enterprise vendor contracts require $1M per occurrence / $2M aggregate for GL, and $1M–$2M for Tech E&O and Cyber. D&O limits typically start at $1M–$2M for seed-stage and increase to $5M–$10M by Series B+. Your broker should benchmark limits against your stage, revenue, and contract requirements.
You are personally responsible for any amount above your policy limit. This is why choosing adequate limits is critical—and why some startups purchase umbrella or excess policies for additional protection above their primary limits.
Definitions are educational and may be modified by your specific policy language, endorsements, and state rules. For regulatory guidance, refer to the California Department of Insurance or the NAIC.
Last updated: July 2026.