Lessons 57-61 discussed the concept of “business risk” exclusions and the multiple parts of the standard CGL’s exclusion J., “damage to property.” Exclusion k, titled “damage to your product” takes away coverage for claims alleging “property damage” – this exclusion does not apply to “bodily injury” claims – to “your product.”
“Property damage” means physical damage or loss of use of tangible property and, general, does not include electronic data (see Lesson 24). The definition of “your product” is where this exclusion gets its teeth. “Your product” includes things “manufactured, sold, handled, distributed or disposed of” by the insured or somebody acting as the insured. It also includes warranties regarding any such “product.”
The idea here is that the general liability insurance company* is not taking on the risk that the policyholder damages the very thing that the policyholder is providing to its customer.
*There could be — and probably should be for distributors and those whose business is primarily in the sale of goods — other insurance to cover this.