Specific Insurance

Specific Insurance is a method of insuring goods in foreign trade transportation where the insured arranges insurance separately with the insurer for each specific shipment or batch of goods, rather than using a long-term arrangement such as an open policy or floating policy. It is used in scenarios including: temporary, non-recurring export business; high-value goods or special risks requiring individually negotiated rates and terms; letters of credit explicitly requiring specific insurance policies; or situations where the buyer specifies insurance conditions and the seller has no long-term insurance agreement. Points to note: Each shipment requires a separate application form listing cargo description, quantity, insured amount, voyage, coverage, etc., and the insurer issues a separate policy for each. Premiums are calculated independently for each policy, making the procedure more cumbersome, and rates may be higher due to the risk of individual shipments. Difference from Open Cover: Open Cover pre-agrees overall underwriting conditions, and the insured only needs to declare each shipment afterward, with the insurer automatically covering and settling premiums periodically; Specific Insurance has no long-term commitment, requiring separate application, underwriting, and policy issuance for each shipment. Difference from Open Policy: An Open Policy typically has minimum premium and automatic coverage clauses, while Specific Insurance has no such arrangements. In practice, if a company exports frequently, Specific Insurance increases administrative costs, and it is advisable to switch to Open Cover to simplify procedures and obtain preferential rates.