What is indicated by the term "named perils" in an insurance policy?

The term "named perils" in an insurance policy specifically refers to coverage that is limited to only those risks or perils that are explicitly listed within the policy document. This means that the insurer will provide coverage for certain events or risks that have been specifically mentioned, such as theft, fire, or vandalism. If a peril is not named in the policy, the coverage will not apply, which distinguishes this type of insurance from "all risks" policies that cover all perils except those specifically excluded.

Understanding this distinction is crucial for policyholders, as it directly affects the scope of their coverage. Named perils coverage provides clarity and predictability about what is protected, which can aid in risk management and allow policyholders to make informed decisions about their insurance needs.