Marine Open Policy

What is a Marine Open Policy?

A Marine Open Policy, also known as a Floating Policy, offers coverage for all transits made by the Insured during the Policy Period. The Policyholder does not need to take out a separate Marine Insurance Policy for each transit, rather he can make a declaration on a periodic basis of all the transits taking place during the Period. A Marine Open Insurance Policy is suitable for organisations which have frequent transit of goods where it is not possible for the Insured to purchase a Specific Policy every time.

How does a Marine Open Policy Work?

A Marine Open Policy is an Annual Policy with a Policy Period of 1 year which covers all transits for a specific leg of transit. For Example, A Marine Open Policy for Imports will cover all Imports taking place during the Policy Period. The Policyholder just needs to submit a declaration of all the imports taking place to the Insurance Company on a monthly basis.

The steps below explain the working of a Marine Open Policy:

1. The Insured needs to declare an Estimated Sum Insured for the Insured Transit (Say, Imports) while purchasing a Marine Insurance Policy and pay the applicable Insurance Premium.
2. The Insured needs to declare the value of the Transits taking place on a monthly basis. This value is deducted from the Policy Sum Insured and the Policy Sum Insured reduces accordingly.
3. If the Sum Insured is exhausted before the expiration of the Policy, the Insured can increase the Sum Insured by paying an additional Premium at the Policy rate.

The Marine Open Policy will contain details about the various types of goods that will be covered under the Policy. Insurance Brokers need to ensure that all the goods for which the Insured is responsible are covered under the Policy.

What is covered under a Marine Open Policy?

The coverage under the Marine Open Policy will be as per the Institute Cargo Clauses attached to the Policy. Few Coverages under a Marine Open Policy are listed below:

1. Fire or Explosion
2. Collission
3. Jettison
4. Overturning or Derailment of Land Conveyance
5. Earthquake, Volcanic Eruption or Lightning
6. War, SRCC, Theft, Pilferage and Non-Delivery Coverage can be obtained by paying additional Premium.

What are the exclusions under a Marine Open Policy?

The Exclusions under a Marine Open Policy will be as per the Institute Cargo Clauses attached to the Policy. Few Exclusions under a Marine Open Policy are listed below:

1. Loss due to Willful Misconduct
2. Loss or Damage due to Inherent Vice or Nature of the Insured Cargo
3. Loss or Damage due to Delay
4. Loss to the Cargo on account of Ordinary Wear and Tear
5. Loss to the Cargo because of Insufficient or Unsuitable Packaging Material used

What is the advantage of a Marine Open Policy?

The advantages of a Marine Open Policy are as follows: The biggest advantage of a Marine Open Insurance Policy is that the Insured does not need to take a Specific Marine Policy for each and every transit. The Insured just needs to make monthly declarations of all the transits taking place in the previous month. This significantly reduces the administrative hassle. Another advantage of a Marine Open Policy is that the Premium of a Marine Open Policy is lesser than the Premium of a Specific Marine Policy. Also, since the Assured knows the Premium Rates in advance, it makes budgeting for the Marine Policy much easier.

Final Take

Businesses having frequent transit of goods will find a Marine Open Policy very convenient and cost-effective. If you wish to purchase a Marine Open Policy, you can reach out to us via email at insurance@qian.co.in or call us on 022-35134695. We would be glad to assist you.