Where are limits of liability typically defined?

Limits of liability are typically defined in the definitions section of an insurance policy. The definitions section provides clarity on key terms used throughout the policy, including what is meant by "limits of liability." This ensures that policyholders and adjusters understand the extent of coverage and the maximum amounts that insurers will pay under specific circumstances.

By clearly defining these limits, the policy intends to eliminate ambiguity surrounding coverage. For instance, this section can specify monetary caps related to different types of coverage, which helps both parties have a clear expectation of the insurer's obligations in the event of a claim.

In contrast, while policy exclusions detail what is not covered and endorsements can modify coverage terms, the primary articulation of limits occurs in the definitions section, making it crucial for understanding the scope of coverage provided by the policy.