Which of the following best describes an “all risk” policy?

Which of the following best describes an “all risk” policy?

• A. A policy that covers all perils except those specifically excluded
• B. A policy that only covers selected perils named in the policy
• C. A policy limited solely to property damage claims
• D. A policy that provides no extra coverage beyond the legal minimum

Answer: (A)

An "all risk" policy is best described as one that covers all perils except those specifically excluded in the policy contract. This means that the policy provides comprehensive coverage for losses or damages resulting from any event that is not expressly mentioned in the list of exclusions. The scope of coverage is broader compared to named peril policies, which only protect against specific risks identified in the contract. For example, if a fire or theft occurs and is not listed as an exclusion, the policyholder would typically be able to file a claim for damages. This gives policyholders a sense of security knowing they are protected against a wide range of risks, making this type of policy particularly advantageous for those seeking extensive coverage for their property. In contrast, policies that only cover selected perils limit coverage to the risks explicitly named, while policies solely addressing property damage do not take into account other types of losses. Additionally, policies that provide no extra coverage beyond legal minimums often fall short of meeting the comprehensive needs of property owners. Therefore, the definition provided in the correct choice reflects the essence of what an "all risk" policy entails.

An "all risk" policy is best described as one that covers all perils except those specifically excluded in the policy contract. This means that the policy provides comprehensive coverage for losses or damages resulting from any event that is not expressly mentioned in the list of exclusions. The scope of coverage is broader compared to named peril policies, which only protect against specific risks identified in the contract.

For example, if a fire or theft occurs and is not listed as an exclusion, the policyholder would typically be able to file a claim for damages. This gives policyholders a sense of security knowing they are protected against a wide range of risks, making this type of policy particularly advantageous for those seeking extensive coverage for their property.

In contrast, policies that only cover selected perils limit coverage to the risks explicitly named, while policies solely addressing property damage do not take into account other types of losses. Additionally, policies that provide no extra coverage beyond legal minimums often fall short of meeting the comprehensive needs of property owners. Therefore, the definition provided in the correct choice reflects the essence of what an "all risk" policy entails.