What is excluded in a general liability policy?

To answer this question, let’s go a little bit deeper into what makes up a general liability policy.

A general liability policy pays compensatory damages when the policyholder is found legally liable for causing some sort of loss or damage. This policy typically consists of four main coverage elements:

• Bodily injury and property damage
• Personal and advertising injury
• Voluntary medical payments
• Tenants legal liability coverage (optional)

Each coverage area has its own set of exclusions.

As you might already suspect, the bodily injury and property damage portion has the most extensive list of exclusions of the bunch. You should refer to your specific policy documentation to get the full list, but here are some of the most important exclusions to be aware of:

• Expected or intended outcomes of the policyholder‘s actions
• Liabilities assumed under contract, unless the insured would have been liable for it in any case (some contracts like leases or easements are considered “insured contracts”)
• Liabilities that arise from failure to meet some statutory requirement (for instance, failing to insure an employee who was legally required to be insured)
• Injury or damage arising from a watercraft, snowmobile, automobile, aircraft, etc.

With personal and advertising injury, the exclusions are a little bit more straightforward. Publications made prior to purchasing the insurance are not covered and neither are publications known to be false.

With voluntary medical payments, the insured(s), their employees, or tenants and contractors are excluded from receiving payments under this coverage. And so are people injured while teaching or participating in some athletic activity because there is some expectation of injury.

That being said, there are exclusions that apply to all four sections of a general liability policy. War, terrorism, nuclear energy, fungi/spores, asbestos, and liability from pollutants are excluded across the board.

There are a lot more exclusions included under the bodily injury and property damage section but those are the main ones. I recommend speaking to your broker or consulting your policy documentation for more details as these types of policies are quite intricate (learn more in 4 Essential Types of Liability Insurance Every Business Should Have).