Open Cover Policy (Generalpolizze)

Concept

An open cover policy is a framework policy under which a policyholder automatically insures in advance all risks or shipments of a type abstractly described in the contract, without requiring individual declaration of each specific transaction before it begins. It is thus distinct from a specific policy, which covers one individually identified risk, and finds its classic application in cargo insurance, where freight forwarders or trading companies with continuously changing shipments need permanent, automatic cover.

Declaration and premium settlement

Under an open cover policy, the policyholder typically reports the shipments or transactions actually carried out to the insurer after the fact, for example monthly or quarterly; the premium is then settled retrospectively based on the reported turnover or shipment values. Cover already exists from the start of the respective shipment or transaction, regardless of the timing of the later report, as long as the transaction falls within the contractually defined scope.

Relevance for insurance practice

For companies with a high transaction frequency – such as in freight forwarding, trading, or export business – an open cover policy avoids the disproportionate administrative burden of declaring every individual shipment, while also ensuring that transactions inadvertently not reported are not left without cover; for intermediaries, a clear contractual definition of scope is essential to avoid disputes over classification at the time of a claim.