In liability insurance, territorial limits pertain to the geographical areas or locations outside of which an insurance policy may not provide coverage to the insured. For instance, a liability insurance policy providing payment for compensation to a policyholder suffering a personal injury or property damage while conducting their business may be valid only within the "territorial limits" stipulated in the contract.
Territorial limits set the specific areas or locations where coverage is valid or excluded. Here is an example of a provision on territorial limits: "Territorial limits means anywhere in the world, except North America, where the policy will only apply in respect of products exported into those countries, where North America means the United States of America and/or Canada and any state or territory incorporated in or administered by the United Stats of America or Canada."
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