What Is Coverage Territory in Business Insurance? | Insureon (2024)

An insurance policy’s coverage territory is the geographic location where its benefits apply. For example, the coverage territory for a health insurance plan may be limited to your state, region, or the nation itself.

That’s why the health insurance and auto insurance you have in the United States might not cover you when traveling outside the country.

This is because insurance companies are regulated at the state level, and your location is an important factor that underwriters use in evaluating their risk management plans and pricing their policies.

The Insurance Services Office (ISO), an insurance rating and data organization, defines the coverage territory for commercial general liability policies as:

• The United States, its territories, possessions, Puerto Rico, and Canada (Mexico is excluded)
• International waters and airspace (for claim events that happen while traveling between places)
• The entire world, if an injury or physical damage arises from products made or sold within the coverage territory
• Business travel, for those who reside in the coverage territory
• Personal and advertising injuries that take place online

Any lawsuit involving general liability insurance must be filed in the United States, its territories and possessions, or Canada. A lawsuit filed in a foreign country would not be covered.

You might be able to expand your general liability coverage, through a policy endorsem*nt, to include other parts of the world.

For commercial auto insurance, your insurance policy is written based on laws in your state. You would typically buy this coverage in the state where your vehicles are registered.

The commercial vehicle insurance you buy in one state will cover you in any other state. Your coverage might also extend to Canada, though it’s unlikely to include any other country.

If your vehicle insurance includes rentals, your coverage territory for rented vehicles could be limited to the United States. You might not be covered when renting a vehicle in another part of the world.

The coverage territory for workers' compensation insurance is usually the state where the covered employees are working, because workers' comp laws and regulations are set by individual states.

If an employee travels to another state for a short time as part of their job, their workers' comp might cover them on a temporary basis, so a work-related bodily injury or illness would still be insured.

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