What is specified (named peril) coverage in an insurance policy?

Specified (named peril) coverage in an insurance policy refers to protection that is limited to certain, explicitly listed risks or events. This means that in the event of a loss, the policy will only cover damages or incidents that occur as a result of these specifically named perils, such as fire, theft, or windstorm. This type of coverage contrasts with broader policies, which might cover a wider range of risks or provide more extensive protection.

The significance of named peril coverage lies in its clarity and precision regarding what is and isn't covered. Policyholders can easily identify which risks are protected, allowing for informed decision-making when it comes to purchasing coverage. If an event occurs that is not listed as a named peril, the insurance policy would not provide any compensation for the loss.

In summary, option B correctly captures the essence of specified (named peril) coverage by emphasizing that protection is only granted for losses caused by the particular perils that are explicitly mentioned in the policy.