All You Need to Know About Business Insurance Exclusions

The insuring agreement in your insurance policy provides the coverage. But, this coverage is narrowed and refined by the exclusions. Your policy 's exclusions eliminate or reduce coverage as well as help define the scale of insurance coverage. Some exclusions are fixed (meaning you can't remove them), but many can be deleted or modified for an extra premium.

• Catastrophic - Most standard business insurance policies exclude risks like earthquakes, floods, and wars because they can affect scores of policyholders at once, leading to catastrophic losses for insurance carriers. This is where specialized endorsements or policies come into play. For instance, you can protect against flood damage using FEMA's flood insurance.
• Maintenance-Related - Policies that cover physical damage often exclude risks that can be eliminated through proper maintenance or foreseeable perils.
• Illegal or Intentional Activity - Most insurance policies typically exclude claims emanating from illegal or intentional actions of the insured.

You can locate business insurance exclusions in the €œExclusions € section or similar segments, like €œProperty Not Covered € or €œLosses Not Covered. € Policies that offer multiple types of coverage usually also include the exclusions that come with each type of coverage. You can also find exclusions on the €œPolicy Definitions € part of your policy. This section is where your insurance defines terms to explain their meaning and outline their scope, usually using exclusionary language. For instance, in the typical commercial auto policy, "auto" refers to land motor vehicles, trailers, or semi-trailers that are designed to be used on public roads. However, "auto" excludes mobile equipment, which also has its own definition in the policy.