CASUALTY PROVISIONS · 5 MIN READ
Business Risk Exclusions and Carve-Backs
The j-through-p exclusions implement the business-risk principle: the CGL insures against liability to others, not against the insured's own faulty workmanship or product failure. Exclusion (j) removes damage to property the insured owns, rents, occupies, or holds in its care, custody, or control — but j(2) carves fire damage to rented premises back in, funneled through the Damage to Premises Rented to You sublimit, and coverage for premises sold or abandoned has its own sub-rule. The most tested pair is j(5) versus j(6): j(5) excludes damage to that particular part of real property on which the insured or its subcontractors are currently performing operations when the damage arises from those operations — the roofer who drops a hammer and cracks the chimney crown he is repairing; j(6) excludes that particular part of property that must be restored, repaired, or replaced because your work was incorrectly performed on it, aiming at defective workmanship discovered before completion. After the work is done, exclusions (k) and (l) take over. Exclusion (k) bars damage to your product itself, and exclusion (l) bars damage to your work arising out of it within the products-completed operations hazard — but with the subcontractor exception: the exclusion does not apply if the damaged work, or the work out of which the damage arises, was performed by a subcontractor on the insured's behalf. That single sentence makes general-contractor completed-operations claims for subcontractor-caused damage potentially covered and is among the most litigated lines in construction-defect law. Exclusion (m), impaired property, bars loss of use claims arising from defects in the insured's product or work or delays in performance, subject to its sudden-and-accidental physical injury carve-back. Exclusion (n), the sistership or recall exclusion, bars the cost of withdrawing or recalling products, work, or impaired property from the market because of a known or suspected defect — recall expense requires the separate product-withdrawal endorsement. Exclusion (p) removes damages arising out of loss of electronic data, since data is deemed not tangible property. Together these provisions force the repair-and-replace cost of bad work onto the contractor while preserving coverage for resulting damage to other property.
Key rules
j(5) excludes the particular part being actively worked on; j(6) the part incorrectly worked on
j(5) applies during ongoing operations to the exact area of current work; j(6) applies to property needing restoration because the insured's work on it was defective.
Why the exam cares: The roofer-drops-a-hammer scenario is the exam's standard vehicle for distinguishing the two.
Exclusion (l) Damage to Your Work does not apply to work performed by a subcontractor
In the completed-operations period, a general contractor's liability for damage caused by or to subcontractor-performed work escapes the your-work exclusion.
Why the exam cares: The subcontractor exception is the pivot of construction-defect coverage questions.
Damage to your product itself is never covered; resulting damage to other property is
Exclusion (k) enforces the business-risk line: the product's own repair or replacement is a warranty cost, while injury the product causes to people or other property is the insured peril.
Why the exam cares: Product-failure questions test whether you separate the product's own loss from the downstream damage.
Recall costs are excluded by the sistership exclusion (n)
Withdrawal, recall, inspection, and disposal expenses for known or suspected defects need the limited product-withdrawal expense endorsement, not Coverage A.
Why the exam cares: Recall scenarios lure candidates into paying market-withdrawal costs the base form never covers.
Electronic data is not tangible property, so data loss is excluded by (p)
Damages arising out of loss of, corruption of, or inability to use electronic data fall outside property damage and require cyber or data endorsements.
Why the exam cares: The data exclusion is tested as the reason CGL policies do not answer cyber losses.
Common traps
- Confusing j(5) with j(6) — j(5) needs active ongoing operations on that particular part; j(6) targets property restored because work on it was defective.
- Missing the subcontractor exception to Damage to Your Work — subcontractor-performed work reopens completed-operations coverage for the general contractor.
- Expecting the CGL to pay for the defective product or work itself — only resulting damage to other property or persons is covered.
- Treating recall expenses as covered property damage — the sistership exclusion bars withdrawal costs unless a product-withdrawal endorsement is purchased.
Draw the timeline — ongoing operations versus completed work — before picking among j(5), j(6), (k), and (l); each exclusion owns a different segment of it.
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