What is the primary difference between named perils and open perils coverage?

The primary distinction between named perils and open perils coverage lies in the scope of protections each type offers. Named perils coverage specifically states which risks are covered; it includes only those perils explicitly listed in the policy. If a risk is not included in this list, it is not covered.

On the other hand, open perils coverage, often referred to as all-risk coverage, provides protection against all risks except for those that are specifically excluded in the policy. This means that unless a peril is mentioned as an exclusion, it is considered covered.

This clarity in the definitions helps policyholders understand the breadth of coverage they have. Open perils coverage tends to be more comprehensive, while named perils coverage requires careful attention to the specifics of what is included to ensure all potential risks are addressed.