Alienated Premises Exclusion

An exclusion that eliminates coverage for property damage liability to premises sold by an entity. For example, a person owns a lot and builds a house on it. After the house is completed and sold, a subcontractor’s faulty wiring causes the house to burn. The buyer, or his/her insurance company, sues for the cost of repairing or rebuilding the house. There is no coverage for this exposure under standard liability policies.