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Cargo & Goods In Transit

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Cargo & Goods In Transit

Knowledge First

Open Cover
An open cover is an agreement (not a policy) whereby the insurer will accept insurance of all shipments made by the assured, within the terms of the cover for a fixed period, usually for 12 months. Being an agreement, it is not stamped. However, stamped policies or certificates of insurance are issued against the declaration made by the assured. The open cover is of great convenience to the clients engaged in regular import/export trade.


Open Policy
It is an Annual Cargo Insurance Contract expressed in general terms and effected for a round sum sufficient to cover a number of dispatches until the sum insured is exhausted by declarations. The Open Policy, also known as the Floating Policy, saves the assured the inconvenience of affecting individually the insurance of goods dispatched anywhere in the world. The policy may cover both incoming and outgoing consignments from anywhere in world to anywhere in world except to sanction countries or those countries where insurer have restriction to cover. The sum insured under the policy should ordinarily represent the assured’s estimated annual turnover of the goods.


Specific Voyage
In Marine Insurance specific policies are issued to cover a specific single transit. Cover ends as soon as arrival of cargo at destination.
Goods in Transit (In-land Transit) Policy
Annual policy is granted in respect of goods belonging to the Assured and or held in trust by the assured and not under contract of sale and or purchase which are in transit by road with UAE and can be extended to cover other GCC countries. Important features of this policy are:

  • Insurable interest to remain with insured
  • Policy not assignable or transferable
  • Issue of Annual policy to transport operators/contractors, clearing and forwarding agents
  • Coverage is available on All Risks basis or Basic cover (Loss or damage to the goods caused due to Fire, Collision and Overturning of the carrying truck). Can be extended to cover loading and unloading risks, our policies include this cover.

In simple words, Marine Insurance covers loss or damage to goods transported through different modes of transport (such as Sea, Air, Land, Rail) from one place to another.

  • Cargo in transit
  • Freight Costs
  • Customs duty & taxes
  • Increased value of cargo 

  • Consignor/ Seller
  • Consignee/ Buyer
  • Any party who hopes to acquire insurable interest in the cargo

Based on the terms of sale either the purchaser or the seller of the commodity purchases Insurance.
The most commonly used Terms of Sale (Inco Terms):

  • Ex-works
  • FOB – Free on Board 
  • C&F – Cost & Freight
  • CIF – Cost, Insurance & Freight
Not so Commonly Used Terms of Sale:
EX- Factory, FCA, FAS, CPT, CIP, DAT, DAP, DDP

Brand new , Used , Household goods and personal effects , Reefer cargoes, Project cargoes

  • Open Cover 
  • Specific Policies
  • Annual Policy

For Sea/Air Freight shipments:-

  • Institute Cargo Clause (A)
  • Institute Cargo Clause (B)
  • Institute Cargo Clause (C ) 
For Land Transit Shipments :-
  • Land Transit (All Risks)
  • Land Transit Basic Clause 

  • Axa Insurance Gulf BSC 
  • American Home Assurance Company
  • Royal and Sun Alliance Insurance Co
  • Oman Insurance Company
  • Tokio Marine & Nichido Fire Insurance Co.Ltd 
  • Qatar Insurance Co. 

  • Contact with rain or sea water.
  • Condensation (ship/container or cargo sweat). 
  • Hijacking of entire container and cargo.
  • Misrouting or non-delivery of cargo due to insufficient marks
  • Pushing and dragging cargo when inadequate material handling equipment or in-experienced labor is used

  • Take photos of damage items immediately 
  • Copy of claim letter on carrier and reply
  • Intimate loss to Insurance Co. 
  • Survey report
  • Exception or Short Landing Certificate
  • Ocean, Air, Rail or Truck bill of lading
  • Commercial (shipper) Invoice, Packing list
  • Bill of Entry, if applicable
  • Quantum Of loss 

  1. Cargo should be professionally packed in order to minimize loss or damage to cargo
  2. If the cargo carried is valuable or white goods then the packing should be in wooden boxes with shrink wrapping so that chances of theft are negligible.