Basic Versus Special (formerly Named Peril Versus All Risk)

A “peril” is defined as a cause of damage or loss. To be covered for damage or loss under a “basic” contract, the damage or loss must be caused by a peril that is “named” or listed in the contract. Consequently, if damage or loss is caused by a peril that is not named, there is no coverage. In addition, the contract’s exclusions must also be considered in determining coverage.

In a “special ” contract, it is not necessary to name or list the insured perils since the intent is to cover all risk of damage or loss. Here, too, the contract’s exclusions must be considered; however, the “special ” form of coverage provides a much greater coverage quality.

Note that “special” coverage should not be construed to mean “all loss” coverage. Certain types of loss are definite and therefore not insurable.