Your Policy Has 47 Exclusions. Can You Name Three?

Pop quiz: Without looking at your commercial insurance policy, name three things it explicitly doesn't cover.

Take your time. I'll wait.

If you're like 94% of the business owners I've talked to over the past decade, you just stared at that question like I'd asked you to recite the periodic table backwards. In Mandarin. While juggling.

Here's the uncomfortable truth: your insurance policy almost certainly contains between 30 and 60 explicit exclusions. These are things the insurance company has specifically, intentionally, deliberately chosen not to cover. They're listed in your policy. You agreed to them when you signed. And statistically speaking, you have no idea what most of them are.

This is not a moral failing on your part. You run a business. You have employees to manage, customers to serve, and approximately 47,000 other things demanding your attention. Reading 150 pages of insurance jargon ranks somewhere between "reorganize the supply closet" and "finally understand cryptocurrency."

But here's where it gets spicy: those exclusions aren't random. They're the insurance company's way of saying "yeah, we know this exact scenario happens, and we've decided we're not paying for it."

The Greatest Hits of "Wait, That's Not Covered?"

Let me walk you through some exclusions that have genuinely surprised business owners I've worked with:

Faulty workmanship. If your construction company builds something incorrectly and it fails, your general liability policy probably won't cover the cost to fix your own work. It might cover damage to other property caused by your faulty work, but the original mistake? That's on you. This one blindsides contractors constantly.

Expected or intended injury. If your bouncer removes a rowdy patron and that patron gets hurt, your policy might deny coverage because the bouncer "intended" the physical contact. The legal nuances here are genuinely fascinating in a "I'm glad I'm not the one in court" kind of way.

Pollution. Unless you've specifically purchased pollution coverage, most commercial policies exclude it entirely. "Pollution" sounds like it only affects chemical plants, until you realize that includes things like a sewage backup in your restaurant or carbon monoxide from your heating system.

Employment-related practices. Your general liability policy almost certainly excludes claims from employees about discrimination, harassment, wrongful termination, or hostile work environment. You need a separate EPLI policy for that. Many businesses discover this when they're already being sued.

Cyber incidents. Your property policy covers fire and theft. It probably doesn't cover ransomware. Your general liability covers bodily injury and property damage. It probably doesn't cover data breaches. Welcome to the twenty-first century, where your biggest risks aren't covered by your oldest policies.

The Endorsement Shell Game

Now here's where insurance gets genuinely interesting: exclusions aren't always permanent. Often, there's an endorsement—a separate document that modifies your base policy—that adds back coverage the main policy excluded.

So your base policy excludes pollution, but maybe you purchased an endorsement that adds back limited pollution coverage for "hostile fire" scenarios. Your policy excludes damage to your own work, but an endorsement adds it back for completed operations.

This is why I say insurance policies aren't documents—they're puzzles. The base form says one thing. The endorsements say another. Sometimes they contradict each other. Sometimes they nest like Russian dolls, with one endorsement modifying another endorsement that modified the base policy.

Professional insurance reviewers spend years learning how these pieces fit together. You spent fifteen minutes skimming the declarations page and decided that was probably fine.

The Three Exclusions Every Business Should Know Cold

I'm not suggesting you need to memorize every exclusion in your policy. That way lies madness and eye strain. But there are three categories you should absolutely understand:

One: Exclusions that relate to your primary business activity. If you're a contractor, know exactly what work-related exclusions apply. If you're a retailer, understand your products liability exclusions. If you provide professional services, know what "professional liability" means and whether your policy covers it.

Two: Exclusions that relate to your biggest potential claims. For most businesses, that's employment practices, cyber incidents, and property damage. Know whether these are covered, excluded, or available via separate policies.

Three: Exclusions that were added by endorsement specifically for your policy. These are modifications the underwriter made based on their assessment of your specific risk. They're often the most relevant exclusions to your actual operations.

The Uncomfortable Question

So let me ask again: What three things does your policy not cover?

If you still can't answer that question, you're not alone. But you're also not protected. You're just paying premiums and hoping for the best.

That's not insurance. That's gambling with a really boring aesthetic.