Open Cargo Policy or Annual Cover
Open Cargo Policy (Annual Cover) :
Open Cargo Policy or Annual Cover – (mainly for regular shippers such as Importers/Exporters) – An Open Cargo Policy is the most common form of cargo insurance, most often used by regular shippers of goods such as importers and exporters including freight forwarding agents, where a policy is issued to cover a number of consignments being shipped to and from various ports and destinations throughout the year. The policy can be either for a specific value that requires renewal once the insured amount is exhausted, or an open policy that will be issued for an agreed period, allowing any number of shipments during that time. This type of cover is sometimes referred to as an ‘Open Cargo or Annual Policy’ as the insurance cover remains in-force for a stated period of time, usually a 12 month period.
How does a Marine Open Cargo Policy work?
A marine open cargo policy is the agreement between a merchant and the insurance company to insure all goods in transit falling within that agreement for an indefinite period, until the agreement is cancelled by either party. The policy specifies:
- the general description of the goods
- the countries or places to or from which the goods will be insured
- the maximum value payable under the policy
- how the goods will be valued
- the conditions of insurance.
The basic open cargo policy includes:
- The Perils Clause
- One or more average clauses
- Additional basic coverage clauses including general average
The other type of Marine Cargo Insurance available is Single Cargo:
Single Cargo Shipment is the next most common form of cargo insurance, mainly taken out by individuals and small businesses for One-Off Shipments of cargo & freight. (See Single Cargo.)