What distinguishes a named peril policy from an all-risk policy?

A named peril policy is distinguished by the fact that it specifically lists the perils or risks that are covered under the policy. This means that for any loss to be compensated, it must result from one of the named perils explicitly stated in the policy. Examples of those perils typically include fire, theft, vandalism, and certain types of water damage.

In contrast, an all-risk policy provides coverage for all perils except those specifically excluded in the policy. This means that it offers broader protection, as it does not require a loss to be due to a specifically listed peril.

The other options suggest characteristics that don't accurately describe the distinction. Limiting coverage to fire and theft does not capture the full essence of what a named peril policy entails. Moreover, stating that it covers only personal items is incorrect as named peril policies can apply to various types of properties, not just personal belongings.