Annual Insurance is a type of open cover in foreign trade that covers multiple shipments throughout the year. The insured signs an annual insurance contract with the insurer, specifying the total insured amount for the year, coverage types, premium rate, and maximum single claim limit. After each shipment, the insured only needs to declare information such as vessel name, voyage number, and cargo value, and the insurer automatically covers it without the need for separate insurance for each shipment. Usage scenarios: Suitable for enterprises with frequent exports, many batches, and stable cargo values, as it simplifies insurance procedures, reduces premiums, and avoids missed coverage. Precautions: Each shipment must be accurately declared, otherwise claims may be affected; the contract usually stipulates declaration deadlines and maximum single limits; it differs from per-shipment insurance (separate insurance for each shipment) and open cover (usually annual but can be more flexible). Annual Insurance emphasizes annual settlement and automatic coverage, suitable for long-term stable export business.
📝 Examples
1. Our company exports frequently and has signed an annual insurance policy with the insurer. After each shipment, we only need to declare it, without the need for separate insurance for each shipment. (Illustrates that annual insurance simplifies the insurance process)
2. According to the annual insurance contract, the maximum single claim limit is $1 million, so this high-value shipment requires additional coverage. (Illustrates that annual insurance has a single claim limit, and excess amounts need attention)
💡 Foreign Trade Tips
Foreign trade terms are the foundation of international business communication
Trade practices may vary slightly by country; pay attention when using them
When using terms in contracts, specify the applicable version (e.g., Incoterms 2020)
For unfamiliar terms, use GlobalSync's multilingual email helper to confirm with your partner