Open Marine Insurance Policy
Aditya Birla Insurance Brokers offer tailor-made protecting solutions for your business. One of these insurance solutions is a Open Marine Policy.
Open Marine Policy covers the inland movement of consignments for your organization. This Policy is ideally suited for organizations that carry out huge volumes of transit-based transactions. As every shipment is at equal risk on the high-seas, it is necessary to insure all cargo shipments – companies transacting in large volumes can find this cumbersome. An Open Policy in Marine Insurance can help protect multiple shipments insured until the policy is cancelled or till the sum insured is exhausted, whichever comes first. This allows companies to carry out transactions rest assured as their cargo shipments are automatically and successively insured.
Open Marine Policy is called as a Floating Policy as the insurer need not buy individual policies for each consignment and each transit journey. This policy protects your business from losses occurred due to sinking, fire, explosion, natural calamities etc. This policy is ideally purchased by businesses involved in the business of movement of goods, for instance, merchants, import-export organizations, banks, shipping agencies etc.
Features of Open Marine Policy
- Insurance coverage of multiple shipments
- Successive shipments automatically covered until sum insured is exhausted
- Annual premium covers all shipments and journeys
- Strong network of surveyors for easy claim procedure
- Hassle-free claim settlement
Key Benefits of Open Marine Policy:
- Comprehensive coverage.
As the name suggests, an Open Policy in Marine Insurance will cover an indefinite number of shipments in transit. Under this policy, the business covers the cargo for a certain sum insured. Until this sum is exhausted or until the policy is cancelled, the insurer will cover any number of shipments – this gives the business a wider coverage from risks and eliminates the hassle of having to purchase multiple policies. It also protects incoming and outgoing consignments to and from India. Also, the business has to simply declare the successive shipments to the insurer and they are automatically covered under this policy.
- No need to buy multiple policies
An Open Marine Insurance Policy eliminates the need to buy an insurance policy for every single voyage and shipment. Businesses can purchase a single insurance policy to cover a larger number of transits and shipments within a certain period, allowing you to protect your shipment without any hassle.
Exceptions to the Open Marine Policy
Exceptions to the Open Marine Policy
The Open Marine Policy does not cover loss or damage to cargo in the event of the following:
- Willful misconduct of the insured
Any deliberate damage to the cargo or losses occurring due to willful misconduct will not be covered by the Open Marine Insurance Policy.
- Insufficiency or unsuitability of packing or preparation of the cargo insured
Businesses need to ensure that the shipment is suitably packed. Damage/losses occurring due to insufficient safety precautions while packing or unsuitable packing or preparation of the cargo shipment is not covered under this insurance policy.
- Ordinary leakage, ordinary loss in weight or volume, ordinary wear and tear, and inherent flaws in the cargo insured
Any kind of ordinary/normal wear and tear, losses in weight or volume or leakage while in transit is not covered under the insurance policy.
Delays due to shipments being detained at customs, ship maintenance, unsuitable weather conditions causing transit delay is not covered under the insurance policy.
- Un-seaworthiness of the vessel
Businesses need to ensure that the vessel used in transit abides by the marine law of seaworthiness. This means that the ship should be in the condition or be reasonably fit to encounter perils at port and at sea. If a ship bearing the shipment is sent out to sea when it is in an unworthy sea state, the insurer is not liable to cover the cost of damages attributable to unseaworthiness.
Sum Insured and Premium
The sum insured of an Open Marine Insurance Policy is decided based on an ‘Agreed Value’. Traditionally, there is 10% margin on the invoice which is added to the sum insured (in case of incidental expenditure). Furthermore, an Open Marine Policy can be expanded to add extended coverage from riots, war, strike etc. at additional premium rates.