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The per person limit in an insurance policy specifically refers to the maximum payout that the insurance company will provide for injuries sustained by a single individual in an accident or incident. This limit is important because it helps to establish the boundaries of financial responsibility for the insurer in cases where multiple people may be injured, ensuring that the claims for each person are managed according to this limit.

For policies that include liability coverage, understanding the per person limit is crucial for policyholders, as it directly impacts how much each injured party can receive. If medical bills or damages exceed this limit, the remaining costs would not be covered by the insurance, which could lead to out-of-pocket expenses for the policyholder.

This definition highlights the significance of the per person limit, distinguishing it from other types of limits that focus on total payouts for all claims in a given year or for property damage.