What is all-risks insurance?

• A. All-risks covers everything not explicitly excluded; named perils covers only listed perils.
• B. Terrorism is covered only by all-risks insurance.
• C. All-risks insurance is mandatory for all architects.
• D. All-risks insurance covers only liability, not property damage.

Answer: (A)

All-risks insurance covers almost any risk of loss to the insured property, except for specific exclusions listed in the policy. That broad protection is what makes it different from a named-perils policy, which only covers losses from perils that are explicitly listed in the policy. In practice, this means if something happens that's not on the exclusion list, it’s covered under all-risks; with a named-perils policy, if the peril isn’t named, there’s no coverage. Policies often still include clear exclusions such as wear and tear, gradual deterioration, or certain war-related events, and the exact exclusions can vary. Terrorism may be included with a special endorsement or excluded entirely, so it isn’t unique to all-risks. And this type of insurance isn’t something architects are universally required to carry; eligibility and requirements depend on the project and contract.