Question

Which term describes coverage that applies only to loss by the perils stated in a policy?

a. Special Form

b. Open peril

c. All risk

d. Named peril

Answer 1

Named peril coverage is the term that applies only to loss by the perils stated in a policy and is more restrictive than open peril or all risk policies.

Step-by-step explanation:

The coverage that applies only to loss by the perils stated in a policy is described as named peril coverage. Unlike open peril or all risk policies, which cover a broad range of perils unless specifically excluded, named peril policies are more restrictive and only cover the risks that are explicitly cited in the policy.

It's essential for policyholders to carefully review their insurance coverage to understand what perils are covered under their named peril policy, as any risks not listed are not covered.