What major exclusion involves losses that occur due to a governmental action?

The major exclusion that pertains to losses resulting from governmental action is correctly identified as government seizure. This concept underlines that when a governmental body acts to seize property—be it for public use or other governmental functions—insurance policies typically exclude coverage for such losses.

This exclusion is rooted in the principle that governments have the right to take property through processes such as eminent domain, and thus, the risk of loss from such actions is not transferred to insurers. This helps insurance companies manage risk since government actions can occur without warning or provocation, making them difficult to predict and insure against.

This clear delineation of coverage is essential for both insurers and policyholders to understand; it sets clear boundaries regarding what is covered under a policy. Other exclusions, like earth movement or pollution, pertain to specific types of damages rather than actions taken by governmental entities, while nuclear hazards involve particular risks unique to nuclear energy and materials, making government seizure distinct in its context and implications.