Specific Policy

A Specific Policy is a type of insurance in international trade where the insurer issues a separate policy for a particular batch of goods, a specific voyage, or specific subject matter. Unlike an Open Policy, a Specific Policy does not establish a long-term insurance relationship in advance; instead, insurance is arranged and issued on a transaction-by-transaction basis. It is suitable for non-recurring export business or temporary transportation needs. Use cases include: single shipments of large-volume goods, transportation of temporary exhibits, and dispatch of equipment for engineering projects. Points to note: Specific Policies usually require negotiating insurance terms, rates, and coverage on a case-by-case basis, making the procedures relatively cumbersome, and they do not enjoy the preferential rates available under an Open Policy. If a company exports frequently, it is advisable to use an Open Policy to simplify the process. The difference from an Open Policy is that an Open Policy is a long-term, blanket insurance agreement under which the insured only needs to declare each shipment and the insurer automatically covers it, whereas a Specific Policy is insured independently for each transaction with no prior arrangement. Foreign trade practitioners should choose the appropriate policy type based on business frequency and risk management needs.