Named Perils
An insurance policy provision that covers only losses caused by specific risks explicitly listed in the policy, as opposed to open perils (all-risk) coverage which covers all risks unless specifically excluded.
Overview
Named Perils policies provide coverage only for losses caused by risks specifically listed in the policy — such as fire, lightning, windstorm, hail, explosion, smoke, vandalism, and theft. If the cause of loss is not on the list, there is no coverage. This contrasts with Open Perils (All-Risk) policies, which cover everything unless specifically excluded.
Why It Matters for COI Compliance
When reviewing a vendor's property or builders' risk coverage, the distinction between Named Perils and Open Perils can significantly affect your risk exposure. Named Perils policies are less expensive but provide narrower coverage. For high-value construction projects, require Open Perils coverage to ensure that unusual or unexpected causes of loss are covered.
Verification on a COI
The certificate may indicate "Named Perils" or "Special Form" (which means Open Perils) in the property coverage description. If the policy form is not specified, request clarification from the broker. For builders' risk insurance, Special Form (Open Perils) is the industry standard for commercial construction projects.
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