A marine open policy is a standing contract that covers all transits of goods made by a business over 12 months. It eliminates the administrative hassle of buying individual policies for every dispatch. However, to keep the cover active, the policyholder must declare every consignment within a specified timeframe (monthly or weekly).
The Theft on the Highway
A manufacturing firm dispatched a truck carrying raw copper rods worth ₹30 Lakhs from their warehouse to a client's site. During a night stop, the truck was hijacked, and the cargo was stolen. The firm immediately filed an FIR and registered a claim under their Marine Open Policy, confident that the transit was protected under the standing arrangement.
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The Missed Declaration Trap
The surveyor reviewed the transit registers and monthly declarations submitted to the insurer. The surveyor found that the copper rods consignment was not declared in the monthly shipping report. The policyholder admitted that their dispatch manager was on leave and forgot to log the shipment. The insurer rejected the claim. Under open policy rules, undeclared shipments are excluded from coverage. The firm had to absorb the entire loss.
- Establish a systematic workflow where invoice generation automatically triggers the transit insurance declaration.
- Verify the maximum value limit per transit (single sending limit) specified in your open policy.
- Submit your monthly declarations and balance premium deposits on or before the due date.
- Conduct quarterly reconciliation audits of your sales ledger against the insurance declarations.