Definition:All-risk property insurance
🏢 All-risk property insurance is a form of property insurance that covers loss or damage to insured property from any peril unless that peril is specifically excluded in the policy language, as opposed to a named-peril policy that lists only the specific causes of loss for which coverage applies. This "open perils" approach — the term many markets now prefer — creates a fundamentally broader starting point for coverage: rather than the policyholder proving that the loss falls within an enumerated list, the burden effectively shifts to the insurer to demonstrate that an exclusion applies. All-risk property insurance is a mainstay of commercial and industrial property programs globally, and versions of it are offered for personal lines homeowners' coverage in many jurisdictions, though terminology and scope differ from market to market.
📑 Under a typical all-risk property policy, the insurer provides coverage for physical loss or damage subject to a defined set of exclusions — which commonly include war, nuclear hazard, intentional acts, wear and tear, gradual deterioration, and in many cases flood and earthquake (often available via separate policies or endorsements). The policy will also specify deductibles, sub-limits for particular perils, coinsurance clauses, and valuation bases (replacement cost versus actual cash value). Underwriters price all-risk covers by analyzing the property's construction, occupancy, protection features, and exposure to catastrophe risk, often relying on catastrophe models for natural hazard perils. In the London market and large commercial placements, all-risk property forms are frequently manuscript policies negotiated between brokers and underwriters, while in personal lines and small commercial segments, standardized wordings — such as those developed by the ISO in the United States — predominate.
🛡️ The breadth of all-risk coverage is precisely why it commands higher premiums than named-peril alternatives — and why it is the preferred structure for businesses and property owners seeking maximum protection against unforeseen events. Coverage disputes under all-risk policies typically revolve around the interpretation of exclusion clauses, making precise policy drafting and thorough claims investigation critical. The COVID-19 pandemic underscored this dynamic globally: business interruption coverage written on all-risk property forms became the subject of landmark litigation — from the UK's FCA test case to proceedings across the United States, Australia, and France — hinging on whether virus-related closures constituted physical loss or damage and whether communicable disease exclusions applied. For risk managers and insurance buyers, understanding the boundary between what an all-risk policy covers by default and what its exclusions carve out is one of the most consequential exercises in any property insurance placement.
Related concepts: