What type of loss does an insurer typically cover in the DP-1 Basic Form?

The DP-1 Basic Form is designed to cover losses specifically identified in the policy, which aligns with the concept of named peril coverage. This type of insurance explicitly lists the perils that are covered, such as fire, lightning, and internal explosion. Because the policy only applies to losses caused by these named perils, it is crucial for policyholders to understand that any losses resulting from perils not mentioned in the policy would not be covered.

By focusing on named perils, the DP-1 Basic Form provides a clear understanding of what is and isn’t covered, allowing policyholders to have a straightforward approach when assessing risk and potential coverage needs. This is why the term "named peril" accurately characterizes the coverage offered by the DP-1 Basic Form, distinguishing it from more comprehensive forms that cover losses due to open perils, which are not limited to specifically listed events.