In a liability policy with a limit of $500,000, what type of limit does the insured have if involved in an accident causing injury to multiple parties?

A liability policy with a limit of $500,000 is an example of a combined single limit. This means that the policy provides a total maximum coverage amount that can be used to pay for damages resulting from a covered accident, regardless of the number of parties involved or the nature of the claims. In cases where multiple parties are injured, this single limit would be applied collectively to settle all claims up to the maximum amount specified.

The concept of a combined single limit simplifies the claims process because it does not differentiate between bodily injury and property damage, allowing the insured to use the available funds flexibly across different types of claims. Therefore, if an accident results in injury to several individuals, the insured can use the entire $500,000 limit to cover the total damages owed, rather than being constrained by separate and potentially lower limits for different categories of liability.

In contrast, other types of limits, such as split limits, would establish distinct maximum amounts for bodily injury and property damage, while an aggregate limit applies to the total coverage for a set period rather than per incident. Understanding these different forms of liability coverage is crucial for policyholders to effectively utilize their insurance in the event of an accident.