Total Limit or Per-Claim Limit
A limit can be one total across all losses or a separate amount for each claim. The same dollar figure protects very differently under each structure.
What to know.
A per-claim limit resets with each claim, so several losses can each be covered up to the figure. A total limit is shared, so every covered loss draws from the same amount.
The arrangement we can offer carries one total limit of up to $1,000,000 across all covered losses, subject to the written terms. Ask any provider which structure it uses.
Where to look next.
One Stated Limit
See how a single limit works.
Amounts Above the Limit
See what stays with the employer.
Is the Limit Enough?
See how to size it.
Choosing between the two structures.
The right structure depends on what kind of loss you are protecting against. If your main concern is one very large failure, a high total limit covers it as long as nothing has been used up. If your concern is a steady trickle of smaller errors over several years, a per-claim limit that resets may serve better, because no single claim reduces what is available for the next.
Whichever you are offered, translate it into a scenario. Imagine three losses of moderate size in one term and see what each structure pays. Then imagine one very large loss and do the same. The comparison usually makes the structure’s strengths and limits clear faster than any description of it.
Common questions on this topic.
Four questions to settle before you rely on it.
Which is better, total or per claim?
It depends on how many losses you might have and how large they could be.
Which does CFH offer?
One total limit of up to $1,000,000 across all covered losses, subject to the written terms.
How do I tell which a provider uses?
Ask and read the clause.
Does the limit renew?
Ask. The written terms say.
How do we compare two offers with different structures?
Run the same scenarios through each: one large loss, and several moderate ones in the same term. See what each pays and what stays with you, then compare along with the cost.
Does the structure affect how claims are handled?
It can. Ask whether claims are reviewed one at a time, how long review takes and what happens to the remaining limit after each payment.
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General information about compliance service protections, not legal or tax advice. Plan-specific questions belong with your counsel, and we will bring them in.
Related guides.
What Limit Does Compliance Protection Carry?
The overview this page belongs to.
Compliance Services With Hold-Harmless Protection
What the protection is, what it covers and what to ask.
Is a $1,000,000 Limit Enough?
The next question on the same topic.
Where the Rules Come From.
The laws and rules named on this page link to the statute or regulation they come from. This is general information, not legal or tax advice, and rules change, so check the current text.
COBRA Excise Tax (26 U.S.C. 4980B)
The tax on failures to meet COBRA continuation coverage requirements.
ERISA Civil Enforcement (29 U.S.C. 1132)
Includes the daily amounts a court may assess for failing to provide required notices.
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