All Risk Coverage
Written by Justin Goodman, CIC, CLCS, CISC, CEO and Co-Founder, Total CSR
Published: August 10, 2026 · Last reviewed: August 10, 2026
In plain language: All risk coverage protects property from any risk of damage except for the specific causes the policy says it does not cover. Instead of listing what is covered, the policy lists what is excluded, so more situations end up covered.
Technical definition: All risk coverage, also called open perils coverage, insures against loss from any cause unless the policy specifically excludes it. Common examples include ISO's Special Form (used in homeowners HO-3 and commercial property CP 10 30). Under this structure, the insurer bears the burden of proving an exclusion applies to the perils insured against, not the policyholder proving coverage exists.
All Risk Coverage at a Glance
| Attribute | Detail |
|---|---|
| Also known as | Open perils coverage, all peril coverage, special form coverage, special perils coverage, all risk insurance |
| Category | Property policy coverage form |
| Lines of business | Commercial property, commercial package insurance, homeowners, inland marine, builders risk |
| Industries most affected | Construction, real estate, retail, manufacturing, hospitality |
| Related forms or endorsements | ISO CP 10 30 (Businessowners Special Property Coverage Form), ISO HO 3 (Special Form homeowners policy), scheduled personal property endorsements, rider or floater forms |
| Who bears the risk | Insurer, unless a specific exclusion applies |
| Common solution | Endorsements or separate policies for flood, earthquake, and other commonly excluded perils |
| Also interacts with | Named peril coverage, exclusions, valuation methods (ACV vs. replacement cost) |
Key Takeaways
- All risk coverage insures property against any cause of loss except for the all risk perils the policy specifically excludes, rather than listing only the perils that are covered.
- All risk coverage matters in daily agency work because it shifts the burden of proof to the carrier, which generally produces more favorable claim outcomes for insured clients than named perils coverage.
- The most common misunderstanding is assuming "all risk" means "all losses are covered." Standard exclusions like flood, earthquake, wear and tear, and intentional acts still apply and often surprise clients who expect protection against unforeseen risks.
- A quick win for agencies is reviewing the exclusions section with every commercial property client at renewal, since the exclusions list, not the coverage grant, defines the real gaps in protection.
What Is All Risk Coverage in Insurance?
All risk coverage is a property insurance structure that covers loss from any fortuitous cause except those the policy specifically excludes. It exists because listing every possible cause of loss is impossible, and named perils policy forms inevitably leave gaps for unusual or unanticipated events. Carriers manage their exposure not by naming what they cover, but by naming what they will not pay for, such as flood, earthquake, war, nuclear hazard, and gradual deterioration.
This structure matters legally because of how courts treat the burden of proof. Under an all perils policy, the policyholder only has to show that a loss occurred and that it is not excluded. Under a named perils coverage form, the policyholder must affirmatively prove the loss falls within one of the listed covered perils. That difference has decided real disputes, particularly in cases involving unusual causes of loss like collapse from an unknown structural defect.
Consider a retail store using ISO's Businessowners Special Property Coverage Form (CP 10 30), an all risk insurance form. A delivery truck backs into the storefront and damages the exterior wall and interior fixtures. Vehicle impact is not a peril the policy needs to name; because it is not excluded, the loss is covered. A named perils policy that failed to list "vehicles" as a covered cause would leave the client exposed.
How Does All Risk Coverage Work?
- The loss occurs. Property is damaged by some fortuitous event, whether common (fire, theft) or unusual (a falling tree limb, a burst appliance hose).
- The claim is filed. The policyholder reports the loss and documents that covered property sustained direct physical damage.
- The coverage presumption applies. Because the policy is all risk, coverage is presumed unless the carrier identifies a specific exclusion that applies to the cause of loss.
- The exclusions review. The carrier examines the policy's exclusions list, such as flood, earthquake, wear and tear, or intentional acts, to determine whether any exclusion bars the claim.
- The outcome. If no exclusion applies, the claim is paid according to the policy's valuation method. If an exclusion does apply, the carrier must be able to point to specific language supporting the denial.
Real Claim Examples Involving All Risk Coverage
Collapsed Roof From Unknown Structural Weakness
A commercial warehouse roof collapsed during a moderate snowfall that was well below the region's typical snow load. The building owner could not identify the exact cause. Because the policy was written on an all risk basis, the owner did not need to prove a specific named peril caused the collapse; the carrier had to show the loss fell under an exclusion such as faulty design or deterioration. The claim was paid after the carrier could not establish that an exclusion clearly applied.
Water Damage From a Failed Appliance Hose
A homeowner with an HO-3 policy returned home to find water damage from a burst washing machine supply line. The named perils coverage used for personal property (Coverage C) required proof the loss matched a listed peril, but the dwelling itself was covered on an open perils basis under Coverage A. The dwelling repair was covered without dispute; the contents claim required additional documentation to confirm the loss matched a covered cause. This type of loss sometimes overlaps with equipment breakdown protection considerations for mechanical failures.
Vandalism During a Building Renovation
A contractor's builders risk policy, written all risk, covered a partially completed office renovation. Vandals broke in over a weekend and damaged newly installed drywall and electrical rough-in. Vandalism was not a peril the policy needed to list affirmatively; since it was not excluded and occurred during the policy period, the claim was paid, minimizing the project delay.
All Risk Coverage vs. Named Peril Coverage: What Is the Difference?
All risk coverage and named perils coverage are the two basic structures for defining what property insurance protects against. All risk coverage lists exclusions and covers everything else; named perils coverage lists the specific causes of loss covered and excludes everything not listed.
| Comparison area | All Risk Coverage | Named Perils Coverage |
|---|---|---|
| Primary use case | Buildings, business personal property, homeowners dwelling coverage | Personal property, older or higher-risk buildings, inland marine schedules |
| Coverage / concept type | Covers all causes of loss except stated exclusions | Covers only causes of loss specifically listed in the policy |
| Typical exclusions | Flood, earthquake, war, nuclear hazard, wear and tear, intentional acts | Same general exclusions, plus any peril simply not named |
| Who is most affected by errors | Clients who assume "all risk" means no gaps exist | Clients who assume a peril is covered because it seems logical, when it is not listed |
| Common mistakes | Failing to review exclusions at renewal; assuming flood or earthquake is included | Failing to confirm a specific cause of loss appears on the covered perils list before binding |
What Are the Most Common Mistakes With All Risk Coverage?
- Assuming "all risk" means "all losses," which leads clients to skip flood or earthquake coverage and then face an uncovered catastrophic loss.
- Failing to review the exclusions section during account rounding or renewal, missing opportunities to offer buy-back endorsements for gaps like sewer backup or ordinance or law.
- Confusing all risk property coverage with liability coverage such as a personal liability umbrella policy, when the term applies specifically to first-party property loss, not third-party claims.
- Overlooking that personal property under a homeowners policy (Coverage C) is often named peril even when the dwelling (Coverage A) is all risk, creating a coverage gap the client does not expect.
- Not documenting the specific exclusion cited in a denial, which increases E&O exposure if the agency cannot show the client was advised of that gap in advance.
How to Explain All Risk Coverage to a Client
Explaining All Risk Coverage to a personal lines client
Your homeowners policy covers your house against nearly any type of damage, except for a short list of things we specifically exclude, like flood or earthquake. That is different from having to prove your specific type of damage was listed as covered. It generally works in your favor, but we still need to talk about the exclusions so nothing catches you off guard.
Explaining All Risk Coverage to a small business owner
Your property policy is written on an all risk basis, meaning it covers pretty much anything that damages your building or inventory unless we've specifically excluded it. That's broader protection than older policies that only covered a fixed list of causes, giving you better coverage against unforeseen risks. The tradeoff is we need to walk through the exclusions together, because things like flood, earthquake, and certain types of water damage usually still need separate coverage.
Explaining All Risk Coverage to a CFO or risk manager
The property form we've placed is all risk, or open perils, which means the burden shifts to the carrier to prove an exclusion applies rather than requiring you to prove a listed peril caused the loss. That distinction has meaningfully improved claim outcomes in disputed causation cases. We should still map your exclusions list against your actual exposures, particularly flood, earthquake, and any parametric gaps, and consider buy-backs or standalone policies where warranted.
Frequently Asked Questions About All Risk Coverage
Does all risk coverage mean every loss is covered?
No. All risk insurance means every cause of loss is covered unless the policy specifically excludes it. Standard exclusions like flood, earthquake, war, nuclear hazard, and normal wear and tear still apply, so clients need a clear explanation of what remains excluded.
Is all risk coverage more expensive than named peril coverage?
All risk coverage typically costs more than a comparable named perils policy because it covers a broader range of causes of loss. The exact premium difference depends on the property type, location, and carrier, so agencies should quote both structures when a client is deciding between them.
What is the difference between all risk and open perils coverage?
All risk and open perils are two names for the same coverage structure. Industry usage shifted toward "open perils" or "special perils coverage" in ISO forms partly because "all risk" was seen as overpromising, but the underlying mechanism, covering everything except stated exclusions, is identical.
Does flood insurance need to be purchased separately even with all risk coverage?
Yes. Flood is a standard exclusion on nearly all commercial and personal property policies, including all risk insurance forms. Clients need a separate flood policy, typically through the National Flood Insurance Program or a private flood carrier, regardless of how broad their base property form is.
Can an all risk policy still deny a claim?
Yes. An all risk policy can deny a claim if the carrier identifies a specific exclusion that applies to the cause of loss. The difference from a named perils policy is procedural: the carrier must point to and support an applicable exclusion rather than the policyholder having to prove the cause of loss was affirmatively listed as covered.
Why do some commercial property forms cover the building on an all risk basis but business personal property on a named peril basis?
Carriers sometimes structure forms this way to manage exposure on high-value or high-theft categories of contents while still offering broad protection on the building itself. Total CSR sees this gap trip up newer CSRs constantly during coverage reviews, since agents often assume the entire policy uses one coverage basis and miss that Coverage A and Coverage C can differ.
Related Insurance Terms
- Named Peril Coverage: a coverage structure that only insures against causes of loss specifically listed in the policy, the direct counterpart to all risk coverage.
- Exclusion: policy language that removes coverage for a specific cause of loss, condition, or circumstance; exclusions are what actually define the limits of an all risk policy.
- Burden of Proof: the legal obligation to establish facts supporting a claim; all risk coverage shifts this burden to the insurer to prove an exclusion applies.
- Actual Cash Value: a valuation method that deducts depreciation from replacement cost, often used alongside all risk coverage to determine claim payout amounts.
- Replacement Cost: a valuation method that pays to replace damaged property without deducting depreciation, frequently paired with all risk property forms.
- Inland Marine Insurance: a line of business that frequently uses all risk forms to cover movable or specialized property like tools, equipment, and goods in transit.
Sources and References
- Insurance Services Office (via NAIC filed forms reference). Businessowners Special Property Coverage Form CP 10 30.
About the Author
Justin Goodman, CIC, CCIP, CISC, CLCS, CRIS, PCIA, QCLS, MFHR
CEO and Co-Founder, Total CSR, Inc.
Justin Goodman is a third-generation insurance broker with over two decades in agency operations. He has trained more than 50,000 CSRs, account managers, and producers in commercial and personal lines coverage, from workers' compensation to construction risk. He was named 2024 Insurance Journal Agent of the Year and one of the nation's top five construction insurance experts by Risk & Insurance. He is the author of Retain, which applies cognitive science research on memory and knowledge transfer to insurance training, and speaks nationally on how agencies build durable technical expertise in their teams.