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A marine open policy is akin to a specialized insurance plan for businesses that frequently ship goods via the sea. Rather than obtaining insurance for each separate shipment, businesses can acquire coverage for an entire year based on the total value of all their shipments. As cargo is dispatched, the insurance amount gradually diminishes, but the starting coverage amount is typically substantial. Thus, businesses that need to send items consistently over a span of time often opt for a marine open policy as a way to simplify and economize.
By general convention, the sum insured under a marine open policy should be no less than four times the limit per shipment or the single carrying limit. The premium is customarily paid upfront, reflecting the projected sum insured. Adjustments to the policy's insured sum mean that both the premium and the insured sum shift in line with the submission of each individual voyage declaration. After meticulous examination, modifications are sanctioned in cases of genuine oversights or incorrect declarations. Any premium on the unadjusted insured sum may be returned once the contract comes to an end.
Much like its counterparts, a marine open policy safeguards against a myriad of risks faced by cargo during its journey. The most common causes for cargo damage or loss during transit include explosions, fires, hijackings, collisions, mishaps, and overturning.
A marine open policy is versatile, offering distinct advantages to a broad spectrum of industries. It holds particular significance for businesses that consistently ship cargo throughout the calendar year. The following are illustrations of entities that could greatly benefit from such a policy:
For businesses that have regular shipping operations, a marine open policy emerges as a prudent choice. Characteristically, this insurance provision is an annual directive, encompassing a singular insured sum. Numerous consignments are included under its umbrella until the entire insured amount is depleted. The essence of an open policy is the luxury it provides to the policyholder by eliminating the need to secure distinct insurance covers for individual consignments or journeys. If your business undertakes a considerable number of analogous transactions within a year, then an open policy would be markedly beneficial.
Adopting a marine open policy can infuse a sense of tranquillity, knowing that your goods stand shielded against potential transit-related losses or damages. By embracing this protective measure, entities like shipping corporations and courier services can fortify themselves against potential financial setbacks stemming from diverse incidents. These can range from natural calamities, international border disputes, complications linked with waterborne or overland transportation, challenges during aerial conveyance, or even simple mishandling of freight. This policy operates as a reparation agreement, compensating for property damages invoked by certain specified hazards, within the confines of the policy's boundaries. A plethora of commodities and cargo fall under this insurance's purview, allowing you the flexibility to customize the coverage to resonate with your distinct business requisites.
This is an article by YouStory written by Palak Agarwal and published on October, 2022
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