The All Risks policy is best described as which of the following?

• A. Applies when every kind of loss or damage is covered.
• B. Is basically the same as a fire policy with EC.
• C. Has exclusions stated in the policy.
• D. Covers the same risks as the Named perils policy.

Answer: (C)

All Risks coverage aims to insure against a broad range of losses, essentially everything that could happen to the property unless the policy specifically excludes it. The defining feature is that the policy spells out exclusions, not every peril covered. That’s why the best description is that exclusions are stated in the policy. This distinguishes All Risks from named-perils policies, which cover only the perils that are listed. In practice, there are standard exclusions such as wear and tear or acts of nature depending on the policy wording, which illustrate that the coverage isn’t universal even though it’s broad.