Definition:All-risk

📋 All-risk describes a category of insurance coverage that protects the policyholder against every peril unless a peril is specifically excluded in the policy language. In insurance parlance, the term signals an open-perils approach — rather than listing each covered cause of loss one by one, the insurer starts from a position of broad protection and then carves out what it will not pay for. This framing is most commonly found in property insurance, inland marine, and certain commercial lines.

⚙️ Under an all-risk form, the burden of proof effectively shifts compared to a named-peril policy. When a claim arises, the insured needs to demonstrate only that a covered loss occurred; it is then up to the insurer to show that an exclusion applies if it wishes to deny the claim. Common exclusions in all-risk property forms include wear and tear, intentional acts, war, nuclear hazards, and sometimes flood or earthquake — perils often handled through separate policies or endorsements. Underwriters price all-risk coverage at a higher premium than named-peril alternatives because the exposure universe is inherently wider.

💡 For commercial buyers and their brokers, securing an all-risk form is generally preferable because it closes gaps that a named-peril schedule might inadvertently leave open. It also simplifies the claims process, reducing disputes over whether a particular event fits within a listed category. In the reinsurance context, treaty wordings often mirror whether the underlying book is written on an all-risk or named-peril basis, making the distinction important for ceding companies negotiating coverage terms with their reinsurers.

Related concepts:

• Definition:Named-peril policy
• Definition:Open-peril coverage
• Definition:Exclusion
• Definition:Property insurance
• Definition:Endorsement
• Definition:Special form coverage