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Marine Open Policy

Unlock year-round peace of mind with a comprehensive marine open policy, protecting all your shipments under one hassle-free policy.

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What Is

Marine Open Policy?

A marine open policy is akin to a specialized insurance plan for businesses that frequently ship goods via the sea. Rather than obtaining insurance for each separate shipment, businesses can acquire coverage for an entire year based on the total value of all their shipments. As cargo is dispatched, the insurance amount gradually diminishes, but the starting coverage amount is typically substantial. Thus, businesses that need to send items consistently over a span of time often opt for a marine open policy as a way to simplify and economize.

By general convention, the sum insured under a marine open policy should be no less than four times the limit per shipment or the single carrying limit. The premium is customarily paid upfront, reflecting the projected sum insured. Adjustments to the policy's insured sum mean that both the premium and the insured sum shift in line with the submission of each individual voyage declaration. After meticulous examination, modifications are sanctioned in cases of genuine oversights or incorrect declarations. Any premium on the unadjusted insured sum may be returned once the contract comes to an end.

Much like its counterparts, a marine open policy safeguards against a myriad of risks faced by cargo during its journey. The most common causes for cargo damage or loss during transit include explosions, fires, hijackings, collisions, mishaps, and overturning.

Features of Marine Open Policy

  • Covers loss or damage of cargo across multiple transits.
  • The insurance policy remains valid until it's either canceled or the insured sum is fully utilized, with the former scenario occurring first.
  • This policy is available in three variants: within the country (inland), from India to a foreign country (export), and vice versa (import).
  • Tailored for businesses that dispatch shipments on a regular basis.
  • Owing to its comprehensive coverage, the premium typically leans towards the higher end of the spectrum.
  • Payment of the premium is expected in advance by the buyer.
  • The insured sum should be equivalent to four times the individual carrying limit or base limit.
  • It's imperative for the insured party to declare every shipment in line with the policy's stipulations, with no exceptions.
  • Both the premium and the insured sum undergo alterations in sync with each individual declaration.
  • The marine open policy permits up to four augmentations to the insured sum within a year.

Who Needs

Marine Open Policy ?

A marine open policy is versatile, offering distinct advantages to a broad spectrum of industries. It holds particular significance for businesses that consistently ship cargo throughout the calendar year. The following are illustrations of entities that could greatly benefit from such a policy:

  • Small and medium-sized enterprises (SMEs)
  • Importers and exporters with regular shipment schedules
  • Establishments frequently transporting cargo of high intrinsic value
  • Freight forwarding entities and logistical organizations
  • A gamut of professionals and entities including merchants, contractors, financial institutions, procurement agents, maritime enterprises, and more.

Why Get

Marine Open Policy?

For businesses that have regular shipping operations, a marine open policy emerges as a prudent choice. Characteristically, this insurance provision is an annual directive, encompassing a singular insured sum. Numerous consignments are included under its umbrella until the entire insured amount is depleted. The essence of an open policy is the luxury it provides to the policyholder by eliminating the need to secure distinct insurance covers for individual consignments or journeys. If your business undertakes a considerable number of analogous transactions within a year, then an open policy would be markedly beneficial.

Adopting a marine open policy can infuse a sense of tranquillity, knowing that your goods stand shielded against potential transit-related losses or damages. By embracing this protective measure, entities like shipping corporations and courier services can fortify themselves against potential financial setbacks stemming from diverse incidents. These can range from natural calamities, international border disputes, complications linked with waterborne or overland transportation, challenges during aerial conveyance, or even simple mishandling of freight. This policy operates as a reparation agreement, compensating for property damages invoked by certain specified hazards, within the confines of the policy's boundaries. A plethora of commodities and cargo fall under this insurance's purview, allowing you the flexibility to customize the coverage to resonate with your distinct business requisites.

Coverages & Exclusions in

Marine Open Policy
The coverages offered by a marine open policy can be delineated as follows
All Risks as per ITC (A) & ICC (A)
These policies are designed to offer extensive coverage against a myriad of risks, detailed by the Institute Cargo Clauses (A) and the Indian Trade Clauses (A). The "All Risks" provision encompasses protection against physical damage or loss of the insured items, unless there's a specific exclusion mentioned in the policy terms. Thus, the policy accounts for numerous incidents, including but not limited to collisions, transport vehicle overturns, piracy, fire, and mishandling-induced damage. This ensures a thorough safety net, capturing unforeseen and unplanned incidents.
War and SRCC (Strikes, Riots, and Civil Commotion) Risks in Import and Export
These policies provide coverage for goods susceptible to damages or losses due to war-related events, such as hostile actions, sabotage acts, and analogous occurrences. Moreover, they cater to disruptions stemming from strikes, riots, civil unrest, and disturbances related to labor that might impede the seamless transit of goods.
Reconditioning Cost
Should there be a covered loss or damage, this coverage remunerates the carrier for the expenditures incurred during the reparation or restoration to the original condition. It might comprise machinery repairs, equipment mending, replacement of lost or impaired items, labor charges, material costs for reconditioning, and other related expenses, including shipping and storage.
Natural Calamities
This coverage offers protection against losses or damages to cargo due to natural disasters, such as hurricanes, storms, earthquakes, or tsunamis.
Should there be an explosion or a related incident, this coverage ensures protection for your consignment and any other property or cargo on board. It also covers salvage and recovery expenses stemming from the explosion and liabilities related to damages to other carriers and properties.
SRCC for Inland Transit
This policy thoroughly covers the adversities linked to inland transit, incorporating potential interruptions caused by strikes, riots, civil unrest, and similar events. The SRCC coverage guarantees financial safeguarding for businesses against potential damages or losses to their commodities due to such unpredictable incidents, regardless of the mode of inland transit, be it by road, rail, or other methods.
Theft, Pilferage & Non-Delivery (TNPD) in Basic Cover
These policies grant primary coverage against specific perils that might arise during the intricate transit of goods from their origin to the final destination. The coverage ensures businesses receive compensation for commodities that are stolen, pilfered, or not delivered to their designated endpoint.

Marine Open Policy Claims Examples

Claim for Product Damage During Sea Export
Imagine a prominent Indian enterprise, ABC Exports, renowned for exporting electronic products to global destinations. In January, ABC Exports filled a container with electronic items, destined for Europe, aboard a cargo vessel. Tragically, during the sea journey, a fire erupted in the ship's storage area, leading to substantial damage to both the container and the products inside. Fast forward to July, and ABC Exports encountered another fire mishap, but on this occasion, their shipment was en route to Asia.
Astutely, ABC Exports had earlier procured a marine open insurance policy. Post both fire incidents, they activated the claims procedure with their insurance company, aiming to attain reimbursement for the damages. The insurance entity evaluated the claims and granted a financial compensation to ABC Exports, aligning with the damaged goods' value, restricted to the policy's stated amount.Astutely, ABC Exports had earlier procured a marine open insurance policy. Post both fire incidents, they activated the claims procedure with their insurance company, aiming to attain reimbursement for the damages. The insurance entity evaluated the claims and granted a financial compensation to ABC Exports, aligning with the damaged goods' value, restricted to the policy's stated amount.
Incident Img

About Marine Open Policy

What distinguishes a marine open policy from a stop policy? Plus Icon
What does a marine open cover policy entail? Plus Icon
Do marine insurance policies come with a surrender value? Plus Icon
How is the "per sending limit" in marine insurance defined? Plus Icon
Who is eligible to procure marine open inland transit insurance? Plus Icon

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Your Story
Indore-based BimaKavach caters to the Business Insurance needs of Small & Medium Enterprises

This is an article by YouStory written by Palak Agarwal and published on October, 2022

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