Open peril policy

Covers all risks, except those specifically excluded in your policy.


What is an open peril policy?

An open peril policy covers all potential losses or damages to your property unless they’re explicitly excluded.

For instance, say you have an open policy that covers all risks at your store except theft. If a fire damages part of your showroom, your insurer will cover the damages. However, if there’s a break-in and inventory is stolen, that loss would not be covered.

Open peril policy vs. named peril policy: What’s the difference?

When it comes to insuring your business, it’s important to understand the difference between open peril and named peril policies. Here’s a quick breakdown:

  • A named peril policy covers only the risks specifically listed in the policy.
  • An open peril policy — sometimes called an allrisk policy — covers all risks except those explicitly excluded from the policy. If a peril isn’t listed as an exclusion, it’s covered.

This matters because it affects the cost of your policy. Open peril policies tend to be more comprehensive but also more expensive, while named peril policies cover fewer risks at a lower cost.

By understanding these policies, you can tailor your coverage to your specific needs and only pay for what you need. So if your business is not at risk for certain perils listed in an open peril policy, a named peril policy might be a more cost-effective choice.

What are the main advantages of an open peril policy for small businesses?

An open peril policy provides broad coverage for small businesses, ensuring protection against all risks unless they’re expressly excluded. This means businesses don’t have to predict every possible issue they might face, offering peace of mind and comprehensive protection.

Another advantage is that the insurer bears the burden of proof in open peril policies. This means that if the insurer feels your claim is beyond the policy’s scope of coverage, they must prove it. If they can’t, they must pay.

What exclusions are usually present in an open peril policy?

Some typical exclusions to an open peril policy are:

  • Flooding
  • Sinkholes
  • Dust damage
  • Wind damage
  • Earthquakes
  • Mold or fungus growth
  • Wear and tear or gradual deterioration
  • Hazards with a higher likelihood of occurrence

Even if a particular type of insurance has been excluded from your open peril policy, it doesn’t mean you can’t get covered for these incidents. Talk to your insurance provider and add a rider to your policy to fill the coverage gaps.

Navigate business insurance with NEXT

At NEXT, we have your back. We’re 100% committed to small business owners and are driven to ensure you have the ideal coverage tailored to your unique requirements.

You can get your tailored quote in 10 minutes by simply answering a few questions online. After securing your coverage, you can instantly access your certificate of insurance whenever you need it.

Start a free instant quote with NEXT.

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Business insurance is divided into different policies. We offer seven types so it's easy to design the coverage that fits your business.
General Liability insurance
General Liability
Protect yourself from accidents that cause physical injury or damaged property.
Professional Liability or Error and Omissions Insurance
Professional Liability/E&O
Shield yourself from lawsuits that claim your work errors caused financial losses.
Workers' Compensation Insurance
Workers’ Compensation
Cover medical bills and lost wages if your employees have an accident at work.
Commercial Auto Insurance
Commercial Auto
Stay on the road with coverage for dents, tows and damage to someone else’s vehicle.
Tools & Equipment Insurance
Tools & Equipment
Upgrade your general liability coverage to protect any gear that’s stolen, damaged or lost.
Commercial Property Insurance
Commercial Property
Keep your building, inventory and equipment protected from fire or water damage.
Business Owner’s Policy Insurance
Business Owner’s Policy
Combine general liability and commercial property into one policy to protect your business.
* To the extent permitted by law, applicants are individually underwritten, not all applicants may qualify. Individual rates and savings vary and are subject to change. Discounts and savings are available where state laws and regulations allow, and may vary by state. Certain discounts apply to specific coverages only.
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Issuance of coverage is subject to underwriting. Not available in all states. Please see the policy for full terms, conditions and exclusions. Coverage examples are for illustrative purposes only. Your policy documents govern, terms and exclusions apply. Coverage is dependent on actual facts and circumstances giving rise to a claim. Next Insurance, Inc. and/or its affiliates is an insurance agency licensed to sell certain insurance products and may receive compensation from insurance companies for such sales. Policy obligations are the sole responsibility of the issuing insurance company. Refer to Legal Notices section for additional information.