What is Open Policy (Marine Insurance)?
Open Policy (Marine Insurance) is A contract for cargo insurance to cover all shipments from time to time as declared by the Insured, a Certificate of Insurance being issued in respect of each shipment. The contract sets out the type of goods to be covered the geographical limitations, the maximum limit any one conveyance and the conditions of cover provided by the Insurer among other things while the Certificate of Insurance shows details of the specific shipment including its specific Sum Insured (often CIF value plus 10% or as required by the Letter or Credit). Premium is payable on declaration to the Insurer and the contract is usually subject to cancellation on notice by either party. An Open Policy is distinct from an Annual Policy which automatically covers all shipments for the Insured without the need for declaration. The premium is calculated annually and is based on an Estimated Sendings figure provided at the beginning of the period of insurance and is adjusted at the end of the period based on the Insured’s declaration of their Actual Sendings. Certificates of Insurance may also be provided by an Insurer to an Insured under an Annual Policy