Which statement describes a named peril policy?

• A. Covers only losses from perils listed
• B. Covers all losses except those listed
• C. Covers catastrophic events only
• D. Covers any loss regardless of peril

Answer: (A)

A named peril policy covers only losses that arise from the perils specifically listed in the policy. The insurer prepaid for coverage limited to those named risks, so if a loss comes from a peril that isn’t listed, it isn’t covered. For example, if the policy lists fire, lightning, and windstorm, a loss caused by flood would not be covered unless flood is explicitly named. This is distinct from open peril (all-risk) coverage, which covers all losses except those explicitly excluded. The other descriptions don’t fit because they imply broader coverage than a named peril policy provides.