What is an open-peril policy?

An open-peril policy is defined by its broad scope of coverage. It provides protection against all risks except for those that are specifically excluded in the policy documentation. This means that unless the policy explicitly states a risk that is not covered, any kind of loss or damage would typically be included under the policy.

This type of policy is beneficial for policyholders as it offers extensive coverage, minimizing the need to manage and understand a long list of covered perils. Open-peril policies are often favored in situations where individuals and businesses want to ensure comprehensive protection against potential risks, from theft to damage from various causes.

In contrast, the other options define narrower or different types of coverage. Coverage for specific risks only indicates a named peril policy, which would not be as comprehensive as an open-peril policy. Coverage that includes natural disasters only implies limited applicability and does not account for other types of risks. Lastly, coverage limited to personal property suggests a restriction in the type of assets covered, which differs from the all-encompassing nature of an open-peril policy.