What characterizes an all risk coverage policy?

An all risk coverage policy is characterized by its broad applicability, as it covers any risk that is not specifically excluded from the policy. This means that the coverage is comprehensive and protects against a wide array of potential losses, except for those risks that are clearly stated as exclusions in the policy documents. This type of policy is advantageous because it provides extensive protection, offering peace of mind to the insured by reducing the ambiguity around what is covered.

In contrast, coverage that focuses on specific named perils only protects against risks that have been expressly mentioned in the policy. While it may have lower premiums, it does not offer the same level of security as an all risk policy. Additionally, while some policies may have limitations on certain types of damages, all risk coverage is typically more inclusive. The premium for an all risk policy may be higher than some other types of coverage, but this is not a defining characteristic of what constitutes the policy itself; rather, it reflects the broader coverage that it provides.