How does a named peril policy differ from an open peril policy?

A named peril policy specifically lists the perils or risks that are covered by the policy. This means that if a peril is not explicitly mentioned in the policy, it is not covered. This type of policy requires the insured to carefully review the list of covered perils to understand what risks are endorsed under their coverage. It offers a more limited scope of protection compared to an open peril policy, which covers all risks unless they are specifically excluded. Thus, the clarity and specificity of coverage make named peril policies straightforward for policyholders to understand the extent of their insurance protection.