Insurance exclusion

Specific events not covered by your insurance policy


What is an insurance exclusion?

An insurance exclusion specifies which events your policy won’t cover, essentially narrowing the scope of coverage. These exclusions help insurers avoid risks they find too high or unpredictable. Sometimes, your policy only lists the perils it covers, meaning everything else is automatically excluded.

Why are insurance exclusions part of an insurance contract?

Exclusions are a standard part of insurance contracts and serve several purposes:

  • Risk management. Exclusions help insurance companies manage their risk exposure by excluding coverage for certain high-risk events or activities.
  • Clarity. Exclusions clarify what is not covered, reducing misunderstandings and disputes during the claims process.
  • Affordability. Excluding high-risk events or coverage scenarios can help make insurance policies more affordable for policyholders.

Which scenarios are typically excluded?

“Open peril” events are typically excluded from coverage. Examples of these include:

  • Earth movements (e.g., landslides, earthquakes)
  • Water damage from external sources
  • Power failures
  • Intentional acts
  • War and terrorism
  • Nuclear events

On the other hand, insurance policies often specify “named perils,” which means only those listed scenarios are covered. Common named perils include:

  • Fire damage and explosions
  • Weather damage
  • Vandalism
  • Theft

It’s essential to carefully review your insurance policies to understand what is excluded from your coverage and consider whether you need additional coverage or a rider to address any gaps in protection.

How NEXT protects your small business

At NEXT, we’re committed to small business owners and want to help you get the coverage you need. That’s why we offer customized business insurance that fits your needs.

Simply answer a few questions online and get your tailored instant quote within 10 minutes. Once you’re covered, you have immediate access to your certificate of insurance.

Start a free instant quote today.

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Business insurance is divided into different policies. We offer seven types so it's easy to design the coverage that fits your business.
General Liability insurance
General Liability
Protect yourself from accidents that cause physical injury or damaged property.
Professional Liability or Error and Omissions Insurance
Professional Liability/E&O
Shield yourself from lawsuits that claim your work errors caused financial losses.
Workers' Compensation Insurance
Workers’ Compensation
Cover medical bills and lost wages if your employees have an accident at work.
Commercial Auto Insurance
Commercial Auto
Stay on the road with coverage for dents, tows and damage to someone else’s vehicle.
Tools & Equipment Insurance
Tools & Equipment
Upgrade your general liability coverage to protect any gear that’s stolen, damaged or lost.
Commercial Property Insurance
Commercial Property
Keep your building, inventory and equipment protected from fire or water damage.
Business Owner’s Policy Insurance
Business Owner’s Policy
Combine general liability and commercial property into one policy to protect your business.
* To the extent permitted by law, applicants are individually underwritten, not all applicants may qualify. Individual rates and savings vary and are subject to change. Discounts and savings are available where state laws and regulations allow, and may vary by state. Certain discounts apply to specific coverages only.
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Issuance of coverage is subject to underwriting. Not available in all states. Please see the policy for full terms, conditions and exclusions. Coverage examples are for illustrative purposes only. Your policy documents govern, terms and exclusions apply. Coverage is dependent on actual facts and circumstances giving rise to a claim. Next Insurance, Inc. and/or its affiliates is an insurance agency licensed to sell certain insurance products and may receive compensation from insurance companies for such sales. Policy obligations are the sole responsibility of the issuing insurance company. Refer to Legal Notices section for additional information.