The Limit per Location signifies the maximum amount the Insurance Company shall pay in the event of a loss or series of losses arising out of an event respectively at any one place or location. If in the event of loss or series of losses occurring out of one particular event if it is found that the insurance company is liable to more than one assured then the total aggregate liability of the insurance company arising of one event shall not exceed limit per location. The location here is defined in the schedule of the policy as opened or closed warehouse, godown, sea port, airport, storage yard, stockpile and another similar storage areas hired or owned by the assured. If in case such storage areas are situated within the compound of the factory premises, estate or storage yard then all such storage areas together shall be considered as one location.
This location limit serves the purpose of making the entire portfolio stable in the absence of which it is likely to cause a severe dent on the financials of an insurance company when a huge claim arises in a particular location.
