Limit of Insurance

Limit of Insurance is the maximum compensation amount agreed in an insurance policy, i.e., the upper limit of the insurer's liability for each accident or cumulative loss during the insurance period. In foreign trade, this term is commonly found in cargo transportation insurance, credit insurance, and product liability insurance. Usage scenarios include: determining the insured amount at the time of application, and defining the compensation ceiling at the time of claim. Notes: The Limit of Insurance is not the insured amount; it may be lower than or equal to the insured amount. If the actual loss exceeds the limit, the excess shall be borne by the insured. Unlike 'Insured Amount', which is the insured value agreed at the time of application, the Limit of Insurance is the compensation ceiling. Unlike 'Deductible', which is the portion of the loss borne by the insured. Foreign trade practitioners need to reasonably set the limit based on cargo value, transportation risks, and contract requirements, and pay attention to whether the policy distinguishes between per-accident limit and aggregate limit.