Named Perils vs. Open Perils Policy
The two basic ways a property policy defines what it covers. A named-perils policy pays only for damage caused by a peril specifically listed in the policy, while an open-perils policy (sometimes called "all-risk" or "special form") covers any cause of loss except the ones specifically excluded.
Why it matters
The distinction decides who has to prove what when a claim is filed. Under a named-perils policy, the policyholder has to show the damage matches a peril on the list. Under an open-perils policy, the burden flips, the insurer has to point to a specific exclusion to deny the claim.
On a real project
A homeowner's policy written on an open-perils basis pays for a falling tree limb that crushes a fence, even though "falling objects" isn't specifically listed anywhere in the policy, since it also isn't on the exclusions list. A named-perils policy would only pay if "falling objects" happened to be one of the listed perils.
Who this matters most to
A Builder's Risk Underwriter decides which form to write a policy on and prices it accordingly, since open-perils coverage carries more risk for the insurer. A Insurance Adjuster has to know which form applies before they can even start evaluating a claim.
Where this goes wrong
An adjuster reviewing a named-perils claim initially denies water damage from a burst pipe because "plumbing leaks" isn't the exact phrase used anywhere in the policy, missing that the actual listed peril, "accidental discharge of water from a plumbing system," covers exactly this. A public adjuster catches the denial only after rereading the named-perils list line by line.