Open Policy

Summary of Open Policy

Marine insurance policy issued to cover various unspecified voyages over the life of the policy. An open policy is issued to a firm engaged in extensive shipping transactions, the details of which are probably unknown at the time the policy is issued; usually, the policyholder declares his transactions on a regular basis (e.g., monthly) and is held covered for all transactions declared at the last reporting date, as well as those undertaken since that time but not yet due to be reported. See Bordereaux.

(Main Author: William J. Miller)

Open Policy (OP) in International Trade

Meaning of Open Policy (op), according to the Dictionary of International Trade (Global Negotiator): A type of insurance policy intended to cover and indefinite number of future individual requirement. The insurance contract remains in force until canceled. Under the open policy, individual successive shipments are periodically reported or declared to the insurer and automatically covered on or after the inception date. Open policies can provide efficiency and savings for all parties concerned, especially when the insured conducts a significant volume of highly similar transactions. Some letter of credit transactions require evidence of an individual policy covering the specified shipment. In such cases it has become the practice to use an insurance certificate. See insurance certificate. See insurance certificate; open marine cargo insurance policy.