Coverage
Definition
The protection provided by an insurance policy. Coverage defines what risks are insured, under what conditions, and up to what limits.
Example
A commercial general liability policy provides coverage for bodily injury and property damage caused by the insured's business operations, up to $1 million per occurrence and $2 million aggregate.
In Practice
Coverage is defined by policy language, including insuring agreements, exclusions, conditions, and definitions. Policyholders should understand what is and isn't covered. Coverage can be broad or narrow depending on policy form and endorsements. Gaps in coverage can leave policyholders exposed to uninsured losses.