What is the difference between named peril coverage and all-risk coverage?

Named peril coverage is designed to protect against specific risks that are explicitly listed in the policy document. This means that the insured is only covered for the perils that are enumerated, such as fire, theft, or vandalism. If a peril occurs that is not listed, the insured will bear the loss.

In contrast, all-risk coverage, also known as open peril coverage, provides protection against a broader range of risks. This type of coverage generally includes all perils except for those specifically excluded in the policy. As a result, all-risk coverage offers more comprehensive protection, covering a wider array of situations.

Understanding this distinction is essential because it influences how an insured party assesses their risk. Choosing between named peril and all-risk coverage involves evaluating the types of risks that are most relevant to the insured's situation and determining the level of coverage they desire.