What is a Shared Aggregate Limit vs an Individual Aggregate Limit?

How to Pick the Perfect Beauty Insurance 

Let’s face it—the buzzwords of beauty insurance can be confusing.

The idea of insurance might be a pretty basic one, but let’s be honest, the terms and vocab that make up this part of your industry are sometimes just annoying. Especially when they overcomplicate what they intend to describe in the first place.

As an insurance company, we get that.

We’re not going to sit here and pretend the vocabulary surrounding this topic is super easy and intuitive.

Sometimes, it’s just not.

That being said, we’re making it our mission to make insurance—especially beauty insurance—much easier to understand so that you can make the informed decisions you need to make about your career.

Because honestly, beauty insurance—and liability insurance in general—isn’t something you can just sort of skip over. It’s so important to be covered and understand what your coverage does for you.

That way, you know what to expect if something bad, unlikely, or improbable ever happens.

Plus, we think it’s super shady that insurance companies put out all these dizzying buzzwords and rarely explain what they mean. It’s our truest intention to make sure you understand these terms and which insurance policy makes the most sense for you.

So, let’s start with these two words: Shared aggregate limit and individual aggregate limit.

BTW, if you ever want a quick guide or an insurance glossary, check out our FAQ page for an easy-to-read guide with all the speedy explanations you might need.

Let's Talk Shared: What is a Shared Aggregate Limit?

It’s likely that you’ll see the term “shared aggregate limit” on your hunt for beauty insurance, depending on the insurance company and its unique policies.

We think it’s important this term is clearly defined.

So, let’s start simple.

Essentially, a shared aggregate limit is the maximum amount of coverage available to all the individuals who are insured under the same shared-limit program or master policy.

Think of it this way—if there are 10 insured individuals in this master policy, the shared limit is the maximum amount of coverage that can be provided for these ten people.

The cons of this? The amount available will decrease every time a claim is paid on behalf of one of the individual policyholders.

So, even if someone who is totally separate from your salon or shop but is in the same master policy needs to file a claim and get covered, that maximum amount will shrink.

A Conversation About Individual: What is Individual Aggregate Limit?

We covered shared aggregate, so you probably can see where this next section is going.

 Unlike shared aggregate limits, individual aggregate limits refer to the amount of coverage that’s available to an individual policyholder (AKA, you) during the policy period.

This limit is yours and yours alone.

It only applies to you—one, covered person—and doesn’t take into account claims filed by or against others. Why?

In other words, it’s all yours.

This type of insurance is unlike shared limits where the group shared limit is reached for the policy year, anyone who files a claim afterward will not be covered under their individual limits.

What's The Best: Shared vs Individual?

Ultimately, that choice is up to you.

Often, the advantage of opting for a shared aggregate limit policy means that you’ll likely have a lower price on your premium. However, it also means that all insured under that policy are—like we discussed—going to share that max number of liability for the period.

Then again, opting for an individual aggregate policy could be pricier, but you’re not stuck worrying about sharing a limit or the claims filed by others on that group policy.

At the end of the day, all we can do is provide you with the need-to-know details that keep you in the loop and totally informed. This way, you can make the most informed decision—AKA, the one that works best for you.

We will say, at Elite Beauty Society, we focus primarily on offering individual limits (AKA, your policy will protect you up to the amount listed on your policy. 

In other words, every insured beauty professional will have their own coverage, and the claims that others make will not affect the individual coverage amount available.

We’re a little biased, but we think we’ve got the best coverage around—take a look at our beauty insurance policies and see for yourself, though!