Exclusion

An exclusion is the part of an insurance policy that says what is not covered. Exclusions narrow the broad grant of coverage and are usually found in the coverage form or causes-of-loss form under a section titled "Exclusions," plus any endorsements attached to the policy.

Exclusions exist for good reasons: to remove uninsurable or catastrophic risks (war, nuclear), separately-priced perils (flood, earthquake), predictable deterioration (wear-and-tear), and to prevent overlap with other policies — for example, professional-services and pollution exclusions on a GL policy push those exposures to professional liability and environmental policies where they're priced properly. Many exclusions can be bought back by endorsement for additional premium.

Exclusions must be read alongside the grant of coverage, definitions, conditions, and any exceptions to exclusions — reading one in isolation can mislead. A denial that correctly applies a clear exclusion is the insurer enforcing the contract as written, not acting in bad faith.