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Insurance: occurrence and aggregation clauses

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Occurrence clauses are commonly used to effect the application of deductibles on limits by aggregating claims.

They may operate in favour of the insured as to the amount of the deductible because it avoids deductibles being separately applied for each separate claim.  And may operate in favour of the insurer in regard to limits because it applies a gross limit to liability for all claims within the relevant occurrence.

Hour’s clauses typically apply to vary the effect of the occurrence definition by deeming multiple claims within a short specified or selected period to form part of one occurrence, often catastrophe events

Hour clauses generally also operate to reduce the application of deductibles but may result in applicable limits applying to an aggregate basket of claims.

Both are more commonly found in reinsurance policies.

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