What is a Named Peril Policy designed to cover?

A Named Peril Policy is designed specifically to cover only those risks or types of losses that are explicitly listed in the policy. This means that if a peril is not mentioned in the policy as one of the covered risks, then any loss resulting from that peril would not be covered.

This is in contrast to an open-peril or all-risk policy, which covers all perils except those specifically excluded. The specificity of a named peril policy allows policyholders to understand precisely what risks are protected under their coverage, which can help them gauge their needs and make informed decisions about additional coverage or endorsements.

Choosing a named peril policy can often lead to lower premiums since it provides a more limited scope of coverage. It's essential for policyholders to review the list of named perils included in the policy and ensure they align with their needs to avoid potential uncovered losses.