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An open policy is a comprehensive cargo insurance policy that covers all types of shipments made by the insured, with specified terms and conditions. It is important to specify shipping methods and locations. It can help comply with regulations and avoid delays. Premiums must be up-to-date for coverage.
An open policy is a form of cargo insurance policy which is used to cover all types of shipments made by the insured. Sometimes referred to as comprehensive coverage, the customer is covered for any situation specified in the terms and conditions of the insurance contract, provided such shipments have been properly declared to the underwriting company. While somewhat costly, the protection provided by an open policy can often be required when goods are being shipped between countries and in some cases is required to comply with regulations put in place by the jurisdiction in which the shipper operates.
With an open policy, it is important for the policyholder to specify the shipping method used, as well as the locations where the shipments will take place. This helps the insurer determine the commercial geographic area that will be covered by the terms of the policy, as well as the modes of transportation that need to be addressed. Many businesses that routinely ship goods by a variety of means, including by land, air, or water, try to secure a policy that has the most comprehensive coverage, even if they don’t currently regularly use all of the different basic modes of transportation.
In some countries, exports cannot leave a port until a document known as a marine insurance certificate is completed and submitted to the appropriate government authorities. Part of the provisions of this document include the presentation of proof of insurance coverage for goods being shipped out of the country. When this is the case, having an open policy with a supplier that is recognized and accepted by the authorities can help minimize the chances of delaying your shipment, which in turn helps your goods arrive in a more timely manner.
As with any type of insurance coverage, an open policy is considered to be in effect only as long as the policyholder is up-to-date on premium payments. If the customer falls behind in premiums, some insurers give a short grace period, usually between ten and thirty days, to pay outstanding premiums before canceling coverage. Different providers have different solutions in case the customer files a claim during this grace period and before the rewards are updated. Often, these solutions are based on home country regulations that must be met in order to have the privilege of selling insurance in the area.
Smart Assets.
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