Which coverage provides protection for various potential risks and damages?

All-risk coverage is designed to provide broad protection against a wide array of potential risks and damages, encompassing nearly all types of losses unless they are specifically excluded in the policy. This type of coverage is advantageous because it does not limit the insured to specific perils, allowing for greater peace of mind that various unforeseen events will be covered.

In contrast, specific coverage is limited to defined events or specific types of losses, which means it does not provide the comprehensive security that all-risk coverage does. Liability coverage specifically pertains to legal responsibilities for injuries or damages to third parties, which does not encompass coverage for personal property or other losses. Limited coverage restricts the scope even further, covering only certain risks or situations, often leading to gaps in protection. Thus, all-risk coverage stands out as the most comprehensive option, making it the correct answer for this question.