What is an open cover?

A standing agreement under which the insurer covers all shipments falling within an agreed description — commodities, routes, modes and limits — for a period, usually a year. Individual consignments are declared under it rather than quoted separately.

Do I have to declare shipments that arrived safely?

Yes. Most open covers require all shipments within the description to be declared, promptly and in full. Declaring only the ones you are worried about is selection against the insurer and is the fastest way to lose the contract at renewal.

What happens if I forget to declare a shipment?

It depends on the wording. Many open covers are written on a held-covered basis so that an unintentional omission does not void the cover on that shipment, usually subject to prompt notification once it is discovered. Read the clause before you need it.

Is an open cover cheaper than insuring shipment by shipment?

For anybody shipping more than occasionally, usually yes — the minimum premium applies to the contract rather than to every consignment. It also removes the risk of a shipment moving uninsured because nobody remembered.

Open cover: insure the trade, not the shipment

A standing contract covering everything within an agreed description, for a period. The declaration is how the insurer knows what moved and how the premium is adjusted — it is a record, not the thing that creates the cover.

Annual policyDeclarationsLimit per conveyance

Single transit versus open cover

	Single transit	Open cover
How cover is arranged	Quoted and bought per shipment.	Agreed once for a period, usually a year, for everything within an agreed description.
What is covered	The consignment named on the certificate.	Every shipment falling within the agreed commodities, routes, modes and limits.
Minimum premium	Applies to every consignment, so small shipments cost disproportionately.	Applies to the contract, not to each declaration.
Risk of a gap	Real — somebody has to remember to insure each shipment.	Low. The cover is standing; the declaration is a record, not the trigger.
Wording	Whatever was bought on the day, possibly different each time.	One wording, one set of conditions, one deductible.
Certificates	Issued with the policy.	Issued against the open cover, as many as the trade needs.
Premium settlement	Paid up front.	Adjusted against declarations, often quarterly.

The limits that cap it

An open cover is not unlimited. Three ceilings sit inside it, and the first two are the ones that get breached by ordinary operational decisions.

Limit per conveyance

The most the insurer will carry on any one vessel, aircraft, truck or railcar. It exists because an accumulation on one conveyance is a single event to the insurer, not many small ones. Consolidating shipments to save freight can quietly breach it.

Limit per location

The most the insurer will carry at any one place at one time — a consolidation warehouse, a terminal, a container freight station. Often lower than people expect, and easy to exceed during a disruption when cargo stacks up.

Agreed limit on the policy

An overall ceiling for the period, against which declarations are tracked. Running close to it before the period ends is a conversation with the underwriter, not a problem to discover at a loss.

Declarations are not optional paperwork

The premium on an open cover is adjusted against what you declared. Declaring selectively — only the shipments that look risky, or only the ones that went wrong — is adverse selection, and an underwriter reading a claims record against a declaration record will see it. The honest version costs less over a renewal cycle than the clever one.

If you hold an open policy with us, declarations and the limit consumption against the agreed limit are visible in the workspace.

Declarations in your workspace

Common questions

What is an open cover?: A standing agreement under which the insurer covers all shipments falling within an agreed description — commodities, routes, modes and limits — for a period, usually a year. Individual consignments are declared under it rather than quoted separately.
Do I have to declare shipments that arrived safely?: Yes. Most open covers require all shipments within the description to be declared, promptly and in full. Declaring only the ones you are worried about is selection against the insurer and is the fastest way to lose the contract at renewal.
What happens if I forget to declare a shipment?: It depends on the wording. Many open covers are written on a held-covered basis so that an unintentional omission does not void the cover on that shipment, usually subject to prompt notification once it is discovered. Read the clause before you need it.
Is an open cover cheaper than insuring shipment by shipment?: For anybody shipping more than occasionally, usually yes — the minimum premium applies to the contract rather than to every consignment. It also removes the risk of a shipment moving uninsured because nobody remembered.

Open policy pricing Certificates under an open cover

InsuranceScanner is an insurance intermediary, not an insurer — see the Terms for our role. Nothing here is a personal recommendation that a particular cover, sum insured or deductible is suitable for you. Where anything on this page conflicts with the certificate, policy schedule or wording issued by an insurer, that document governs.