As a high net worth insurance specialist, we’re sometimes asked to explain what we mean by the terms “perils based” policy, “all risks” policy and “worldwide cover”.
We first have to explain what a “peril” is.
A peril is simply a risk. Fire, flood, storm or theft, the kind of things we all insure against.
Perils Based Policies
A perils based policy will cover a list of perils. These are to be found in the policy wording. Any loss deemed to be suffered as a result of one of these insured perils is likely to be paid (subject to any exclusions).
Most “standard” policies are perils based policies. If some eventuality or another is not on the list of perils then it is not covered, even if it is not specifically excluded.
Standard perils include, but are not limited to fire, lightning, explosion, earthquake, storm, flood, weight of snow, escape of water, theft or attempted theft and subsidence.
All Risks Policies
An “All Risks” policy works differently. It will cover all losses, except those specifically excluded. This makes it much harder for an insurer to decline a claim as they will have to prove that the loss is excluded. This usually streamlines the claim process.
All of the mid and high net worth policies we offer are All Risks. There are of course standard exclusions such as faulty workmanship, lack of maintenance, but the cover is far wider than a “standard policy”.
All of the mid and high net worth policies we offer also give worldwide cover by design.
This means that your contents, art, antiques and any jewellery (not subject to a separate endorsement such as a safe clause or floating limit) are covered both inside and outside of your home. However, countries that are excluded specifically by the insurer are not included, such as (but not limited to) Iraq and Syria. Most “standard” perils based policies only give limited cover outside of the house, under a personal possessions section. For many, especially those not using a broker to specifically tailor a policy, this limit can be too low.
If you think you might benefit from All Risks, worldwide cover, please speak to Lark and we will find a policy best suited to you and your lifestyle.
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