Floating Policy

A Floating Policy is a comprehensive open insurance policy used in international trade, typically for goods shipped over a long period in multiple batches. The insured and insurer agree on a total insured amount, coverage scope, premium rate, and maximum limit per shipment. For each shipment, the insured simply declares the shipping details to the insurer, and insurance automatically takes effect, with the corresponding amount deducted from the total insured amount until the total is exhausted. It is commonly used when an exporter has a long-term supply contract with a regular buyer, or when a freight forwarder or logistics company frequently insures for multiple clients. Precautions: The insured must declare each shipment honestly, otherwise claims may be affected; when the total insured amount is used up, renewal or separate insurance must be arranged promptly; the value of each shipment must not exceed the agreed per-shipment limit. Compared with a 'specific policy', a floating policy simplifies per-shipment insurance procedures and reduces the risk of missed insurance; compared with an 'open cover', a floating policy has a clear total insured amount limit, while an open cover usually has no total amount cap and only specifies rates and conditions.