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📋 '''Blanket policy''' is an [[Definition:Insurance policy | insurance policy]] that provides a single aggregate limit of coverage across multiple properties, locations, or categories of assets, rather than assigning a separate [[Definition:Sum insured | sum insured]] to each individual item or site. This structure is widely used in [[Definition:Commercial insurance | commercial insurance]] — particularly in [[Definition:Property insurance | property insurance]] — to protect businesses that maintain inventory, equipment, or operations spread across numerous locations. Instead of scheduling every building or asset individually with its own limit, the blanket approach wraps all covered exposures under one overarching amount, giving the insured flexibility in how the coverage responds to a [[Definition:Loss | loss]].

⚙️ Under a blanket policy, the [[Definition:Insured | insured]] typically reports total values across all covered locations or asset classes, and the insurer provides a single limit that can be applied to any combination of those exposures when a [[Definition:Claim | claim]] arises. For example, a retailer with fifty stores might carry a blanket limit of $100 million covering buildings and contents across all sites, rather than negotiating individual limits for each store. If a fire destroys one location valued at $8 million, the full blanket limit is available to respond — the insured does not face a shortfall caused by an underestimated per-location limit. [[Definition:Underwriter | Underwriters]] often require detailed [[Definition:Statement of values | statements of values]] and may apply [[Definition:Coinsurance clause | coinsurance clauses]] or [[Definition:Margin clause | margin clauses]] to ensure that the total insured values reported are reasonably accurate. Blanket policies are common in markets such as the United States, the United Kingdom, and across Europe, though specific policy wordings and regulatory requirements governing value reporting vary by jurisdiction.

💡 The practical advantage of blanket coverage is its ability to absorb valuation imprecision at the individual-location level — a persistent challenge for large organizations whose assets fluctuate with inventory cycles, renovations, and business expansion. This flexibility reduces the risk of [[Definition:Underinsurance | underinsurance]] at any single site, which can be devastating when a major loss occurs at a location whose scheduled limit was outdated. For [[Definition:Risk manager | risk managers]], blanket policies simplify administration and streamline the [[Definition:Renewal | renewal]] process, since they do not need to renegotiate limits site by site each year. However, the trade-off is that [[Definition:Premium | premiums]] may be higher, and insurers scrutinize total reported values carefully to guard against [[Definition:Moral hazard | moral hazard]] or systematic underreporting.

'''Related concepts:'''
{{Div col|colwidth=20em}}
* [[Definition:Property insurance]]
* [[Definition:Sum insured]]
* [[Definition:Coinsurance clause]]
* [[Definition:Statement of values]]
* [[Definition:Underinsurance]]
* [[Definition:Scheduled coverage]]
{{Div col end}}

Definition:Blanket policy - Revision history

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