Exterior insulation refers to any type of thermal insulation which covers the outside of a building's structural walls or structural framework. As it is rarely exposed directly to outdoor air, it is generally covered with the outer layer of the facade.

This is possible in conjunction with any facade system except an exposed structure facade (although it may exist at other parts of a building which uses an exposed structure facade system in part of its outer surface).

The insulation lies outside the load-bearing wall or framework and normally behind the exterior finish. On a partly exposed structure, the stated exception concerns the surfaces whose structural material remains exposed.