limits under multiple policy years LUMP

Limits under multiple policy years is an approach to structuring limits for insurance programs covering low-frequency but high-potential-severity exposures, such as excess liability (over commercial general liability (CGL) policies), pollution liability, and directors and officers (D&O) liability.

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Under this approach, a single aggregate limit remains in effect for multiple years as opposed to a series of separate policy limits, applicable to single years, as under a traditional approach. Since a single limit applies over several years, a higher limit than would typically be purchased in a single policy year can usually be obtained at a lower cost.



multiyear single limit (MYSL)