How does an open peril policy differ from a named peril policy?

An open peril policy is designed to provide coverage for all risks except those specifically excluded in the policy. This essentially means that unless a particular peril is listed as one that is not covered, it is assumed to be included in the coverage. This type of policy offers broader protection compared to a named peril policy, which only covers risks that are explicitly listed in the policy document.

In contrast, a named peril policy specifically outlines which perils are covered, leaving out any coverage for risks not mentioned. This makes an open peril policy generally more comprehensive, as it safeguards against a wider range of potential events that could cause loss or damage. The explicit exclusions in an open peril policy are critical to understanding which scenarios are not covered, but as a whole, the open peril approach provides a greater degree of security for the insured.