Registered Insurance Brokers of Ontario (RIBO) Practice Exam

What type of policy generally protects against all risks unless specifically excluded?

1. Named perils policy

2. Basic policy

3. All risk policy

4. Liability policy

The correct answer is: All risk policy

The correct choice is indeed the all-risk policy. This type of insurance coverage is designed to provide protection against a broad spectrum of risks and perils, encompassing any damages or losses that are not explicitly excluded in the policy terms. Essentially, it covers everything except the specific exclusions listed, which makes it more comprehensive compared to other policy types. In contrast, a named perils policy only covers those risks that are explicitly listed in the policy. In this case, if something occurs that is not mentioned in the policy, it would not be covered. Basic policies generally offer a limited set of protections and focus on common risks, while liability policies specifically cover legal liabilities arising from injuries or damage to other parties, which does not provide coverage for property losses or damages sustained by the insured. Thus, the all-risk policy stands out for its extensive coverage, making it the optimal choice for broad protection against a wide range of potential losses.