An open policy is also known as a ‘floating policy.’ It is worded in general terms and is issued to take care of all “shipments” within its scope.
An open cover is handy for significant export and import firms-making multiple regular shipments, which would otherwise find it very inconvenient to obtain Insurance cover separately for every shipment. It is also possible that through an oversight on the part of the insured, a particular shipment may remain uncovered and should a loss arise in respect of such cargo, it would fall on the insured themselves to be borne by them.
Hence a permanent form of Insurance protection through an open cover is taken by big firms having regular shipments.
An open cover describes the cargo, voyage and Insurance coverage in general terms and takes care automatically of all shipments which fall within its scope. It is usually issued for 12 months and is renewable annually.
There are certain advantages of an open policy compared to specific marine policy
a) Automatic and continuous insurance protection.
b) Clerical labour is considerably reduced.
c) Some savings in stamp duty.
A flexible Marine Cargo Insurance Policy covers the insurable Risks associated with the seller's transit of goods. The stock turnover policy was an apt solution for disjointed coverage gaps, consignments to be declared under every Insurance policy and premium paid. A policy can be extended to cover the movement of raw materials/semi-finished/finished goods between insured’s premises and their job worker’s premises situated at various locations in India.
