Which of the following best describes the term "named-peril coverage"?

Named-peril coverage is a type of insurance policy that specifically outlines the risks that are covered by the policy. This means that only the perils explicitly listed in the insurance contract will be covered in the event of a claim. For example, if a policy covers fire, theft, and vandalism as named perils, then only losses arising from those specific risks would be eligible for reimbursement.

This contrasts with an all-risk or open-peril policy, which provides coverage for all losses except those specifically excluded in the policy. Named-peril coverage is particularly useful for policyholders who want to have clarity and control over the exact risks for which they are insured. Knowing the precise list of covered perils helps individuals assess their risk exposure and plan accordingly.

In comparison, the other options describe different aspects of insurance that do not pertain to the definition of named-peril coverage. Thus, option B correctly identifies the distinctive feature of named-peril coverage.