Understanding Insurance: Named Perils Insurance Policy

2 Minutes Read

A named-perils insurance policy covers accidental physical damage or loss to an insured property that is caused by perils that are specifically mentioned or listed in the policy document.

Examples of a named-perils policy are Fire and Burglary Insurance.  A Fire Insurance policy covers physical damage or loss due to a fire outbreak. If the loss is due to flooding, the insurance company will deny the claim unless flood was specifically mentioned in the policy as a covered peril.

Discussion

Assets All Risks insurance is typically more costly than Named Perils insurance. The buyer therefore has to decide which type of asset insurance to buy to suit his/her business needs. The choice depends on the type and size of business one is running, its location and other considerations.   

If you decide to buy a named-perils insurance policy, you may need the expertise of an experienced insurance broker who knows something about the type of business you are running. He/she will help you put together a policy that best covers the perils likely to cause physical damage or loss to the assets you use in running your business.