What is Special Form?
Special Form, also known as an “all-risk” insurance policy, provides extensive coverage for various types of property or perils. Unlike named-peril policies, which only cover risks explicitly listed, a Special Form policy covers all potential risks except for those specifically excluded in the policy. This makes it a popular choice for homeowners and businesses seeking comprehensive protection.
In the context of property insurance, Special Form is commonly used for insuring residential and commercial buildings, personal property, or equipment. For example, it can protect against events such as theft, vandalism, and certain types of water damage—provided these events are not excluded in the policy language.
However, it’s crucial to understand the exclusions that come with Special Form policies. Typical exclusions might include flood damage, earthquakes, or wear and tear. To address these gaps, policyholders can often purchase additional coverage or endorsements.
A practical example of Special Form coverage might involve a commercial building damaged by a sudden roof collapse due to heavy snow. If the cause of the damage is not explicitly excluded, the policy would likely cover the loss. This broad protection makes Special Form a robust option for safeguarding against unforeseen events.