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Business Risk Exclusion

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Business Risk Exclusion
A clause in a business's insurance policy stating that it does not provide coverage for products that do not meet the company's quality specifications. For example, if a company produces widgets guaranteed to last 15 years and they only last four, the company's insurance may not cover refunds or other losses because of the business risk exclusion.


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The third edition contains updated coverage of various issues related to commercial general liability policy, including pollution-related coverage, government-imposed cleanup, trigger of coverage, and business risk exclusions.
In finding for the insured, Washington Energy, the court declared each business risk exclusion to be vague.
Also known as the "your work" exclusion, the rationale of the business risk exclusion is commonly explained as follows: The insured, as a source of goods or services, may be liable as a matter of contract law to make good on products or work which is defective or otherwise unsuitable because it is lacking in some capacity.
 
 
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