Open Cover

Open Cover is a long-term insurance contract between an importer or exporter and an insurance company, under which goods shipped multiple times within a specified period (usually one year) are automatically covered without the need to insure each shipment separately. Its core features are 'automatic coverage and periodic settlement': as long as the goods and modes of transport fall within the scope agreed in the contract, each shipment is automatically covered once dispatched, and the insured only needs to declare shipment details periodically and pay premiums. It is typically used by enterprises with frequent import and export activities, many shipments, and small batch sizes, as it simplifies the insurance process and prevents missed coverage. Points to note include: clearly defining the scope of coverage (such as cargo types, routes, and modes of transport), declaration deadlines (usually immediately after shipment), premium settlement cycles, and maximum limits. Compared with Specific Cover, Open Cover is more efficient but slightly less flexible; it is similar to a Floating Policy, but Open Cover usually has no total insured amount limit, whereas a Floating Policy does. Foreign trade practitioners should ensure accurate declarations, otherwise claims may be affected.