What is Open Perils coverage designed to insure against?

Open Perils coverage, also referred to as "All Risk" coverage, is structured to insure against direct physical losses unless those losses are explicitly excluded in the policy. This type of coverage is comprehensive and encompasses a wide array of potential risks, providing broader protection compared to named perils coverage, which only addresses specific risks that are listed in the policy.

Under Open Perils, the onus is generally on the insurer to demonstrate that a claim falls under one of the exclusions if a loss occurs. This contrasts with a named perils policy, where the policyholder must prove that a loss is covered by one of the specific perils listed. Consequently, Open Perils coverage is particularly valuable as it offers a greater sense of security to the insured, covering a variety of events such as theft, vandalism, fire, and other unforeseen circumstances, provided they aren’t expressly excluded.

Natural disasters or liability claims are just subsets of potential risks that could be covered under Open Perils coverage; thus, emphasizing the broader scope of coverage available. The specificity of exclusions is what delineates this policy type from more limited forms of insurance that would only cover predefined risks.