Which of the following is true regarding Named Peril Builders' Risk Insurance?

Named Peril Builders' Risk Insurance is characterized by its specific coverage structure. This type of insurance explicitly lists the perils that are covered under the policy. This means that if a peril is not mentioned in the list, it is not insured. Such a format allows property owners and builders to have a clear understanding of what risks they are protected against, contrasting it with all-risk insurance, which provides broader protection against a wide range of potential damage.

For instance, if a policy includes coverage for fire and vandalism but does not list wind or hail, any damage resulting from those unlisted perils would not be covered. Named peril policies can be particularly useful in managing costs and specifying risk, but they require careful consideration to ensure that adequate protection is in place for all potential risks that may arise during the construction process.

In summary, the distinguishing feature of Named Peril Builders' Risk Insurance is that it specifies the perils that are insured, leading to a more tailored insurance product for construction projects.