We use cookies to improve your website experience. To learn about our use of cookies and how you can manage your cookie settings, please see our Cookie Policy. By continuing to use the website, you consent to our use of cookies. Close

CHAPTER 14 Cargo insurance and open covers

International Trade and Carriage of Goods

Page 223

Page 224

Page 225


Cargo insurance and open covers

Cargo insurance and open covers

Peter MacDonald Eggers QC

14.1 Introduction

Open covers, and floating policies, are well-known insurance instruments in international trade and have been used for a long time. Open covers are commercially convenient, expedient, even if somewhat exotic, creations of the commercial mind. They are convenient because they enable both assured and insurer to make a contractual arrangement, specifying in advance the applicable terms for the insurance of multiple subject matters, whether ship, cargo, freight or liability risks. In this way, a commodity exporter, trader or importer whose business it is to ship numerous cargoes at numerous places at any time during a calendar year, can avoid negotiating a new and separate insurance contract for each cargo shipped, and make all the necessary arrangements at one time for the year under a facility whose terms (as to premium, limits, scope of cover, insuring conditions, special warranties and the like) are agreed when the open cover is placed. They are expedient because such instruments are variously adaptable, as reflected in the different types of cover available, ranging from fully obligatory floating policies to fully discretionary open-cover facilities.

The rest of this document is only available to i-law.com online subscribers.

If you are already a subscriber, click login button.