What is "broad-form coverage"?

Broad-form coverage refers to an insurance policy designed to provide coverage for multiple perils. This type of coverage is beneficial for policyholders because it protects against a wide range of risks rather than being limited to specific incidents or named perils.

When an insurance policy is classified as broad-form, it typically includes various types of risks that are not excluded, making it more comprehensive. For example, in property insurance, broad-form coverage might cover damages resulting from fire, theft, vandalism, and some natural disasters, providing a solid safety net for the policyholder.

In contrast, other options describe coverage types that are narrower in focus. Named peril coverage only addresses specific risks explicitly listed in the policy. A policy that limits coverage to property damage does not account for liability or other forms of risk that may be relevant to the insured party. Similarly, a policy exclusively focused on liability coverage does not encompass property damage or other types of risks, which are vital for broader risk management. Thus, broad-form coverage stands out as the most inclusive option among them.