All-Risk Policy

What Does All-Risk Policy Mean?

An all-risks policy is an insurance coverage that protects against all potential property damages or losses, except for those specifically excluded in the policy. This type of coverage contrasts with named perils policies, which only protect against risks explicitly listed in the policy. Since the term “all” can imply broader coverage than what is actually provided, the term “all-risks” is no longer as commonly used. Instead, the industry has shifted toward using terms like “open perils” or “special perils.”

An all-risks policy is also referred to as open perils or special perils coverage.

Insuranceopedia Explains All-Risk Policy

For example, an all-risks homeowner’s policy that does not list flood as an exclusion would cover damages caused by a flood. Since it offers the most comprehensive coverage, an all-risks policy is typically the most expensive. Insurance companies determine the cost of the policy based on the likelihood of a claim occurring, factoring in the level of risk associated with the insured property.