Definition:All-risk coverage (also all-risks)
📋 All-risk coverage (also all-risks) is a form of insurance policy that provides protection against any peril or cause of loss that is not specifically excluded in the policy language, rather than listing only those perils that are covered. In property and marine insurance — the classes where all-risk forms are most prevalent — this structure offers the broadest available scope of protection to the insured. The term is widely used across global markets, though its precise contours depend on the policy wording and the exclusions schedule that accompanies it.
⚙️ Under an all-risk policy, the burden of proof is effectively shifted compared to a named peril form. If a loss occurs, the policyholder needs to demonstrate that a fortuitous event caused the damage; the insurer then bears the burden of proving that an exclusion applies if it wishes to deny the claim. Common exclusions in all-risk property policies include wear and tear, inherent vice, intentional acts, war, nuclear events, and increasingly, cyber-related losses. In the London market, all-risk wordings have a long history in both commercial property and cargo lines. In the United States, ISO commercial property forms and manuscript wordings alike may be structured on an all-risk basis, often labeled "special form" coverage. Asian markets, including Japan and Singapore, also use all-risk structures, particularly for large commercial and industrial accounts.
💡 The practical significance of all-risk coverage lies in the broader safety net it provides, but policyholders and brokers must scrutinize the exclusions carefully — because those exclusions define the true boundaries of protection. Disputes over whether a loss falls within an exclusion are among the most litigated issues in insurance law globally. The COVID-19 pandemic generated a wave of such disputes over business interruption coverage under all-risk policies, with courts in the UK, Australia, and the United States reaching divergent conclusions on whether virus-related losses were excluded. For underwriters, pricing all-risk coverage requires a more comprehensive view of potential loss scenarios than named peril forms, since any risk not explicitly excluded is implicitly covered.
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