In which type of insurance policy are the damages capped based on the occurrence of each individual claim?

In a per occurrence policy, the damages are capped based on each individual claim made during the policy period. This means that the insurer will pay up to a specified limit for each separate incident or occurrence, regardless of how many claims arise from different occurrences within the coverage period. This structure is beneficial for policyholders since it allows them to receive compensation for multiple distinct claims, each evaluated against its limit.

In contrast, other types of policies operate differently. A per claim policy, for instance, might imply a limit applies to each claim. However, 'per occurrence' generally encompasses the notion that each incident could result in multiple claims, which still fall under the same occurrence limit. Lifetime aggregate, on the other hand, sets a total cap that applies to all claims over the duration of the policy, limiting coverage to a maximum lifetime benefit. Finally, combined single limits consolidate liability coverages into a single limit that applies to all claims, making them less specific in terms of occurrence.

Thus, the per occurrence policy distinctly segments damages by individual events, making it the correct answer in this context.