What is indicated by the per person limit in an insurance policy?

The per person limit in an insurance policy refers to the maximum amount that the insurer will pay for losses sustained by any one individual as a result of a particular event or incident covered by the policy. This limit is important because it helps define the extent of coverage available to each person affected, ensuring that the insurer's obligations are clearly outlined.

For example, if a policy has a per person limit of $50,000 and multiple individuals are involved in a covered accident, each person can receive up to that specified amount for their injuries or losses. This structure helps prevent disproportionate payouts and manages the insurer's financial exposure effectively.

Understanding the per person limit is critical for policyholders, as it can affect their financial recovery after an incident. The other options, while they pertain to different aspects of insurance limits, do not specifically capture the meaning and implications of the per person limit.