Glossary

Exclusion

A policy provision that removes coverage for specified perils, property, people or types of loss that the insuring agreement would otherwise include.

Also called: policy exclusion, exclusion clause, exclusionary language

An exclusion takes something back out of the coverage the insuring agreement grants. It can exclude a peril (flood, earth movement), a type of property (land, licensed vehicles), a kind of damage (your own faulty work), a class of person (one insured suing another) or a subject (pollution, professional services).

Read a policy in order. The insuring agreement says what is covered. The exclusions say what is not. Many exclusions then carry exceptions, sometimes called give-backs, that restore part of what was removed, and the conditions govern how a claim runs. The CGL's contractual liability exclusion, for example, does not apply to an "insured contract." The exception can be where the useful coverage actually lives.

Courts in most states read exclusions narrowly against the insurer, and the insurer usually has the burden of proving an exclusion applies. In many states, the policyholder has the burden on an exception to an exclusion. Manuscript and carrier-specific forms differ, so the same label can mean different things in two policies.

Exclusions also arrive by endorsement, mid-term or at renewal. Compare the endorsement schedule year over year. CGL exclusions: what a general liability policy does not cover and commercial property exclusions: what the standard policy won't pay walk through the common ones, and endorsement explains how they are attached.

Last reviewed October 10, 2026

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Related terms

Endorsement A written amendment to an insurance policy that adds, removes or changes coverage, limits or conditions, and controls over the base form where they conflict. Pollution exclusion A policy exclusion removing coverage for injury, damage and clean-up from the release of pollutants, leaving spills to a separate pollution policy. War exclusion A clause removing losses caused by war, military action and similar hostilities, which cyber policies now stretch to attacks backed by a nation-state. Insured vs insured exclusion A D&O exclusion removing coverage for claims brought by one insured against another, such as a company suing its own directors. Causes of loss form The part of a commercial property policy that lists which perils are covered, offered in basic, broad and special versions of increasing breadth.

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