What Are Common Exclusions On a General Liability Insurance Policy?

Claims that should be covered by other insurance.
• Securities violations: should be covered by a D&O policy
• Pollution: should be covered by a pollution liability or environmental impairment liability policy
• Employee benefits and ERISA violations: should be covered by a fiduciary liability policy
• Professional services: should be covered by an E&O policy
• Contracts: contracts that aren’t listed as “insured contract” should likely be covered by an E&O policy
• Harassment, discrimination, workplace torts: should be covered by an EPLI policy.
• Intellectual property: should be covered by a GL, E&O/media liability, cyber liability or patent insurance policy.
• Violation of privacy laws: when not covered as a personal injury, this should be covered by a cyber policy.
 
Expected or Intended Injury
Carriers do not want to pay any expenses for injuries when that injury was expected or intended. Note that this does not mean that intentional acts are not covered, just intentional injuries.
Why is this important? Because it puts the burden on the carrier to show that an act intended to injure and that it didn’t just unexpectedly lead to an injury. An example of this is would be a security contractor who accidentally drills into a gas line while installing a camera. Yes, the intentional act of drilling into the wall did cause thousands of dollars in damage and repairs. But since his intent was to install a camera and not to damage the gas line, we would expect the carrier not to try to deny the claim on these grounds.
 
NOTE: Claims adjusters often confuse these and it is important to be wary of the distinction.
 
Limitation to Designated Premises
This policy amendment trims back the coverage territory. Normally a policy would offer coverage for acts that occur, and claims that are made, anywhere in the US. With this limitation, the occurrence needs to happen at the location/project listed in the endorsement or there will be no liability coverage at all. This leaves a coverage gap for many companies.

Another element is that new locations would need to be approved by the underwriter before they could be added to the policy. This would likely trigger the “newly acquired property” clause in the policy as well.
 
Exclusion/Limitation – Designated Products
Sample endorsements
This endorsement limits products and completed operations coverage to only those products specifically listed on the endorsement. Be particularly wary of this endorsement on any company selling a tangible product to businesses or consumers.
 
Contractual Liability Limitation
This exclusion changes an important definition in the policy: “insured contract.” Normally this definition includes a paragraph “f.” which adds to the definition a wide variety of contracts used in business. By having a broad definition, claims arising out of more types of contractual disputes could be covered by the policy.

The contractual liability limitation reduces coverage by deleting this paragraph. As a result, the only contracts considered by the policy to be “insured contracts” are lease agreements, sidetrack agreements, easement or license agreements, obligations to indemnify a municipality, and elevator maintenance agreements. This reduces the carrier’s exposure if they feel the contracts involved in the business fall outside their risk appetite.

This exclusion should be avoided at all costs. If it is added to the policy, the insured would have to notify the underwriter about each new contracts to have any hope of getting insurance coverage.
Some variations of the exclusion exist which leave that broadly written paragraph “f.” intact in the definition but also add the caveat: “provided the bodily injury or property damage is caused, in whole or in part, by you or by those acting on your behalf.” This is preferable as it still requires that the insured is at least partially responsible for coverage to apply while not limiting the types of contracts that could be considered “insured contracts.”
 
Personal and Advertising Injury
Certain companies are excluded from coverage since their business model features elevated personal and advertising injury risk. These include:
1. Advertising, broadcasting, publishing or telecasting;
2. Designing or determining content of websites for others;
3. An Internet search, access, content or service provider.

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11/25/2024