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An open policy is a comprehensive cargo insurance policy that covers all types of shipments made by the insured, provided they are properly declared. It is important to specify the mode of shipping and locations where shipments will be made. It can help minimize shipping delays and is only considered in force if premiums are up to date.
An open policy is a form of cargo insurance policy used to cover all types of shipments made by the insured. Sometimes referred to as blanket coverage, the customer is covered for any situation specified in the terms and conditions of the insurance agreement, provided such shipments have been properly declared to the underwriting company. While somewhat expensive, the protection provided by an open policy can often be necessary when goods are being shipped between countries, and in some cases necessary to comply with regulations set forth by the jurisdiction where the shipper conducts business.
With an open policy, it is important that the insured party specify the mode of shipping being used, as well as the locations where shipments will be made. This helps the insurance provider determine the geographic area of commerce that will be covered under the terms of the policy, as well as the modes of transportation that need to be addressed. Many companies that routinely ship products through different modes, including ground, air, or water transportation, try to secure a policy that has the broadest coverage, even if they don’t currently use all the different modes of transportation on a regular basis. base.
In some countries, exports cannot leave a port until a document known as a certificate of marine insurance 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 open policy coverage with a supplier that is recognized and accepted by authorities can help minimize the chances of shipping delays, which in turn helps products arrive in a more timely manner.
As with any type of insurance coverage, an open policy is only considered in force as long as the insured is current with premium payments. If the customer falls behind on premiums, some insurers do allow a short grace period, usually between ten and thirty days, to pay the outstanding premiums before canceling coverage. Different providers have various solutions in case the customer files a claim during this grace period and before the premiums are updated. Often those solutions are based on regulations in the country of origin that must be met in order to have the privilege of selling insurance in the area.
Smart Asset.
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