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 Log In button.

Copyright © 2024 Maritime Insights & Intelligence Limited. Maritime Insights & Intelligence Limited is registered in England and Wales with company number 13831625 and address 5th Floor, 10 St Bride Street, London, EC4A 4AD, United Kingdom. Lloyd's List Intelligence is a trading name of Maritime Insights & Intelligence Limited.

Lloyd's is the registered trademark of the Society Incorporated by the Lloyd's Act 1871 by the name of Lloyd's.