What is loss-of-use exclusion? Simple Definition & Meaning

Definition of loss-of-use exclusion

A loss-of-use exclusion is a provision in some insurance policies that excludes coverage for certain events or conditions. For example, a failure-to-perform exclusion may exclude coverage for the loss of use of undamaged property resulting from the insured's delay or failure in performing an obligation.

Other examples of exclusions include:

Automobile exclusion: excludes coverage for damages arising from the use of a vehicle owned, operated, rented, or borrowed by the insured.
Business-risk exclusion: excludes coverage for common risks of doing business, such as harm to the insured's product or work.
Pollution exclusion: excludes coverage for bodily injury or property damages arising from the discharge, dispersal, release, or escape of pollutants.

These exclusions limit the scope of coverage provided by the insurance policy. For example, if a business has a failure-to-perform exclusion in their policy and fails to deliver a product on time, resulting in the loss of use of undamaged property, they may not be covered for the resulting damages.

Simple Definition

Loss-of-use exclusion is a term used in insurance policies that means certain events or conditions are not covered. For example, if a person's car is damaged and they cannot use it, the loss of use may not be covered by their insurance policy. This is called a loss-of-use exclusion. Other types of exclusions include pollution exclusion, employee-liability exclusion, and expected/intended exclusion. These exclusions are meant to limit the liability of the insurance company and protect them from certain types of claims.

Legal Definitions - loss-of-use exclusion

Definition of loss-of-use exclusion

Simple Definition