Order Policy (Orderpolice)
An order policy is an insurance document commonly used in cargo insurance that can be transferred by endorsement, tying the rights under the insurance contract to a person named in the document or to that person's order.
Concept
An order policy is an insurance document commonly used in cargo and marine cargo insurance that, unlike an ordinary named policy, can be transferred to a third party by endorsement (a written transfer notation). It directs coverage to whichever person is named in the document or designated by its order, making it a document similar in nature to a negotiable instrument.
Relevance in International Trade
The transferability of an order policy is of particular practical importance in international trade in goods, where a shipment may be resold several times while in transit before reaching its final destination; by passing on the order policy together with the other trade-relevant documents (such as the bill of lading), coverage automatically transfers to the respective new owner of the goods.
Distinction from Bearer and Named Policies
While a named policy ties the rights exclusively to a specific person named in the contract, and a bearer policy is transferred by the mere handover of the document, transferring an order policy additionally requires an explicit endorsement; it thus represents an intermediate form between these two extremes, combining the flexibility of transferability with a degree of formal control over the transfer process.