Exclusions in Liability Insurance: Exceptions and Coverage

Summary

This practice note addresses exclusions and exceptions in commercial insurance policies, how they inter-relate, and their effects on coverage. A discussion of the contractual liability exclusion is included, as it is an often misunderstood exclusion appearing in many business insurance policies. The practice note focuses on the Commercial General Liability (CGL) policy because it covers a broad spectrum of potential claims that a business may encounter and is also where the contractual liability exclusion frequently becomes an issue. The practice note will prepare you to better evaluate situations in which the contractual liability exclusion may be raised to deny a client's claim or, if representing the insurer, when it may be appropriate or inappropriate to assert a coverage defense.