Open Policy in Marine Insurance: A Smart Option for Frequent Shippers

 

Open Policy in Marine Insurance: A Smart Option for Frequent Shippers

If your business involves regular cargo shipments, an open policy in marine insurance may be the most cost-effective and convenient solution. This type of policy allows continuous coverage for all shipments during a specified period.

What is an Open Policy in Marine Insurance?

An open policy is a long-term marine insurance agreement that covers all shipments undertaken by the insured party within a particular time frame—typically six months to a year. Instead of issuing a separate policy for each shipment, a single comprehensive contract is used.

Benefits of an Open Policy

  • Streamlined administration

  • Cost savings on bulk shipments

  • Automatic coverage for declared shipments

  • Reduces risk of non-coverage due to oversight

Ideal for Whom?

  • Exporters and importers with regular shipping schedules

  • Freight forwarders

  • Manufacturing and trading companies

Components of an Open Policy

  • Declaration Clause (to report each shipment)

  • Valuation Clause (value basis of cargo)

  • Premium Clause (based on volume/weight/value)

  • Period of Insurance Clause (usually 12 months)



FAQs

Q1: Is each shipment still declared under an open policy?
 Yes, each shipment must be declared for it to be covered.

Q2: What if I miss declaring a shipment?
 Missed declarations may result in claim denial. Some insurers allow late declarations within a grace period.

Q3: Can I cancel an open policy?
 Yes, cancellation is allowed, often with prior notice and subject to pro-rated refunds.

Possible Statistics

  • Around 70% of international trading companies use open policies to reduce repetitive paperwork.

  • Companies with open marine insurance save up to 15-20% annually on premiums.

Reference Link:
 Marine Insurance Guide - Insurance Regulatory Authorities

Conclusion

For businesses managing frequent cargo movements, choosing an open policy in marine insurance ensures seamless coverage, cost efficiency, and simplified logistics. This approach eliminates the hassle of individual policies while maintaining strong financial protection. When shipping is your backbone, an open policy in marine insurance is the smart, strategic choice.

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