Insurance glossary · How policies work
exclusion.
An exclusion is a part of the policy that says what it won’t cover. Reading the exclusions is how you find out whether your riskiest work is really covered.
What does an exclusion do in an insurance policy?
It takes something out of the coverage. The policy first says what it covers, then the exclusions list what it won’t pay for even if it would otherwise fit. Reading them is how you find out whether your riskiest work is really covered.
Where are the exclusions in my policy?
In two places: the exclusions section of the base coverage form, and any exclusion endorsements attached to the policy. The endorsements are the ones that vary most between insurers and quotes.
What are common exclusions on contractor general liability?
Standard ones include your own faulty work, expected or intended injury, pollution, injuries to your own employees (covered by workers’ comp instead), autos, and professional services. Added by endorsement, some policies also exclude residential work, work above a certain height, subcontracted work without certificates, or specific operations like roofing or exterior insulation.
Can an exclusion have exceptions?
Yes. Many exclusions give some coverage back. The contractual liability exclusion, for example, has an exception for “insured contracts,” and the pollution exclusion has narrow exceptions for things like heat or smoke from a hostile fire. The exceptions are often where the real coverage sits.
Who has to prove an exclusion applies?
Generally the insurer, once you’ve shown the claim falls within the coverage. In many states the insured then has to show an exception to the exclusion applies. Courts also tend to read unclear exclusions narrowly, against the insurer that wrote them.
Why do two quotes with the same limits cost such different amounts?
Often because of exclusions. A lower price can come from endorsements that exclude work you actually do. Comparing the forms side by side is the only way to know whether you’re comparing the same coverage.
Can I get coverage for something a policy excludes?
Sometimes. Some exclusions can be removed for added premium, and some gaps are filled by a separate policy, like pollution liability, professional liability or commercial auto. Others are standard across the market and fall to a different kind of coverage entirely.
Do exclusions work differently by state?
The wording is the same, but state courts differ on how they read some common exclusions, like pollution or faulty work, and some states limit specific exclusions by law. Your broker can tell you how the ones that matter to your work are read where you operate.
by trade.
- General contractorsExclusions for subcontracted work or residential projects can matter more than the limit, especially if you use uninsured subs.
- PlumbingWatch for exclusions on water damage, mold and certain repair work, which are where plumbing claims come from.
- HVACPollution and mold exclusions can leave refrigerant and moisture claims uncovered unless another policy picks them up.
- RoofingHeight, residential and specific-material exclusions are common on roofing policies.
- ElectricalProfessional services exclusions can matter for design-build electrical work.
where you’ll see it.
- Coverage formThe “Exclusions” section listing what the policy doesn’t cover.
- Forms scheduleEndorsements titled “Exclusion,” “Limitation” or “Amendment” that narrow coverage.
- Claim lettersA denial or reservation of rights letter citing a specific exclusion.
know what’s not covered before you need it.
Riza reads the exclusions on every quote against the work you actually do, flags the ones that matter, and looks for options that remove them or another policy that fills the gap.
Get a quoterelated terms.
Coverage it touches: General liability