“All Risk” coverage, often referred to as an “All Risks” policy, is a type of insurance coverage that provides broad and comprehensive protection against a wide range of perils or risks. In the context of insurance, the term “all risk” can be a bit misleading, as it doesn’t mean that absolutely every risk is covered. Instead, it generally covers all risks that are not explicitly excluded in the insurance policy. Here’s what you should know about “All Risk” coverage:

  1. Comprehensive Coverage: “All Risk” coverage is designed to be one of the most inclusive forms of insurance. It typically covers a wide array of risks and perils that could lead to the loss or damage of the insured property or assets. These perils may include common risks like fire, theft, vandalism, and accidents.
  2. Named Perils vs. All Risk: In contrast to “Named Perils” policies, which only cover specific risks that are explicitly listed in the policy, “All Risk” policies take the opposite approach. Instead of specifying what is covered, they specify what is excluded. This means that if a risk or peril is not excluded in the policy, it is generally covered.
  3. Exclusions: While “All Risk” coverage is broad, it doesn’t cover every conceivable risk. Insurance policies usually include a list of exclusions, which are types of risks or situations that are not covered by the policy. Common exclusions might include intentional acts, wear and tear, and specific types of catastrophic events like earthquakes or floods.
  4. Customization: Insurance companies often allow policyholders to customize their “All Risk” policies by adding specific endorsements or riders to cover risks that are otherwise excluded. For example, a homeowner might add an endorsement to cover valuable jewelry or art that exceeds the standard policy limits.
  5. Appraisals and Valuations: To ensure that high-value items are adequately covered under an “All Risk” policy, insurers may require appraisals and valuations of these items. This helps determine the coverage amount for these specific assets.
  6. Cost and Premiums: “All Risk” coverage tends to be more expensive than policies with narrower coverage. However, it provides a higher level of protection and peace of mind, especially for those who want to be safeguarded against a broad range of risks.
  7. Review Policy Carefully: It’s crucial for policyholders to thoroughly review their “All Risk” policies to understand what is covered, what is excluded, and any specific conditions or requirements. Understanding the policy’s terms is essential to ensure that you have the protection you need.

“All Risk” coverage is commonly used in property insurance, such as homeowners’ insurance or commercial property insurance, and can also be applied to other types of insurance policies, including marine cargo insurance. Policyholders should work closely with their insurance providers to tailor their coverage to their specific needs and to ensure they have a clear understanding of what their policy includes and excludes.