When you take out an insurance policy, it’s essential to understand not only what is covered, but also where coverage ends or is qualified by specific terms. This is where exclusions, conditions, and limitations come into play. These terms help define the scope of your insurance and set out the circumstances in which your policy will or won’t respond to a claim.

Exclusion #

An exclusion refers to something that your policy specifically does not cover under any circumstances. If an event or item is excluded, it means no claim can be made for that particular type of loss or liability.

Example:

• A Professional Indemnity policy may exclude claims arising from asbestos exposure.
• A Business Insurance policy may exclude flood damage unless flood cover has been specifically added.

Exclusions are designed to remove certain risks from your policy, typically those that are uninsurable, require specialist cover, or fall outside the scope of standard protection.

Condition #

A condition is a rule, duty, or requirement that you, as the insured, must meet for the policy to apply or for a claim to be paid. Conditions help ensure that risks are managed properly and fairly.

Example:

• A Public Liability policy might include a condition requiring you to use licensed contractors for specific types of work.
• A Property Insurance policy may have a condition that requires alarms to be armed when the premises are unattended.

If you fail to meet a condition, your insurer may have grounds to reduce or deny a claim.

Limitation #

A limitation (or limit of liability) places a cap on the maximum benefit the insurer will pay in relation to certain items, events, or circumstances. Limitations ensure that certain risks are covered only up to a specified amount.

👉 Example:

• A Business Insurance policy may include a sub-limit of $5,000 for portable tools.
• A Commercial Motor policy may limit coverage for personal property inside a vehicle to a specified amount.

Limitations are designed to manage exposure on higher-risk or higher-value items where cover is restricted.

Exclusions, conditions, and limitations are usually detailed in your policy wording and highlighted on your policy schedule. It’s essential to review and understand these terms:

• To avoid surprises at claim time.
• To make sure your policy suits your specific risk profile.
• To help you identify any additional coverage you might need.

If you’re unsure about what’s covered under your policy or need assistance tailoring coverage to your specific needs, please contact our team. We’re here to help ensure you’re properly protected.