Legal Definitions - specific policy

A specific policy, often referred to as a basic-form policy, is an insurance contract that provides coverage exclusively for the particular risks or perils explicitly named within the policy document. Any loss resulting from a cause not specifically listed in the policy is not covered.

A specific policy is a type of insurance coverage designed to protect a single, clearly identified item, asset, or risk, rather than a group of items or a general category. This policy precisely names or describes the exact subject of the insurance and often assigns a specific value to it. It contrasts with "blanket" or "general" policies that might cover multiple items or risks under a broader description.

• Example 1: Insuring a Rare Collectible Car

  Imagine a collector owns a vintage 1965 Shelby Cobra, a unique and highly valuable automobile. Instead of adding it to a standard auto insurance policy that covers everyday vehicles, the collector purchases a separate, specific policy for this particular car. This policy details the car's make, model, Vehicle Identification Number (VIN), and its agreed-upon market value.

  This illustrates a specific policy because the insurance is tailored to one distinct asset—the 1965 Shelby Cobra—and its unique characteristics and value are explicitly stated and covered, rather than being part of a general fleet or household contents policy.

• Example 2: Coverage for a Single Art Exhibition

  A museum is hosting a temporary exhibition featuring a priceless sculpture on loan from another institution. To protect this single, high-value piece during its transit, display, and return, the museum obtains a specific policy. This policy would name the sculpture, detail its estimated value, and cover risks like damage or theft for the duration of the loan and exhibition period.

  This demonstrates a specific policy because the coverage is focused solely on one particular artwork for a defined period and purpose, rather than a general policy covering all items in the museum's permanent collection.

• Example 3: Protecting a Unique Piece of Industrial Machinery

  A manufacturing plant has a highly specialized, custom-built machine that is critical to its operations and extremely expensive to repair or replace. While the plant has a general property insurance policy covering its buildings and standard equipment, it opts for a specific policy for this unique machine. This policy would identify the machine by its serial number, model, and specific function, providing dedicated coverage against breakdowns or damage.

  This exemplifies a specific policy because it singles out one particular piece of equipment for dedicated coverage, acknowledging its unique value and importance beyond what a standard, broader property insurance policy might offer.