What characterizes a special risk policy?

A special risk policy is defined by its focus on covering specific unusual risks that are explicitly identified in the policy. This means that rather than providing blanket coverage for all potential risks, the policy zeroes in on particular circumstances or hazards that might not be covered by standard insurance.

For instance, special risk policies might be tailored for individuals engaged in high-risk occupations or activities, such as extreme sports or hazardous professions, where standard policies may not offer adequate protection. By clearly outlining the unique risks it covers, this type of policy helps ensure that the insured party is protected against those specific circumstances while excluding risks that fall outside of the defined criteria.

While special risk policies may sometimes be more expensive than standard policies due to the unique nature of the risks they cover, this is not a defining characteristic. Rather, the focus remains on the specific risks addressed in the policy. Thus, it is crucial for those considering a special risk policy to understand precisely what is and isn't included in their coverage.