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Types of Marine Insurance: Specific, Open Cover, and Sales Turnover Insurance

Marine insurance plays a crucial role in safeguarding goods, vessels, and cargo from the many risks associated with transportation over sea and other waterways. Among the various types of marine insurance policies, three common ones stand out for their relevance in different trade scenarios: Specific Insurance, Open Cover, and Sales Turnover Insurance.

1. Specific (Voyage) Insurance

Specific Insurance, also known as Voyage Policy, is issued for a particular shipment or voyage. It covers a specific consignment from a point of origin to a destination, typically used by businesses that do not ship frequently.

Key Features:

Covers one-time shipment only.

Policy expires once the cargo reaches the destination or the journey ends.

Ideal for small businesses or infrequent exporters.

Premium is based on cargo value, route, and nature of goods.

Example:

A company exporting furniture from Mumbai to Dubai for a one-time order would opt for a specific policy to cover that shipment.

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2. Open Cover Insurance

Open Cover is a more flexible form of marine insurance used by businesses that ship goods regularly. Rather than issuing a separate policy for each consignment, an open cover agreement provides continuous coverage over a period (usually 12 months).

Key Features:

Ideal for regular exporters or importers.

Covers multiple shipments automatically under a master policy.

Reduces administrative work and speeds up the shipping process.

Premiums are calculated on a declaration basis, depending on the actual shipments made.

Example:

An electronics trader who exports goods weekly to multiple countries can use an open cover to ensure uninterrupted insurance protection for every shipment.

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3. Sales Turnover Insurance (STI)

Sales Turnover Insurance is an advanced marine insurance solution designed for large-scale businesses with high-volume turnover. It covers all shipments based on the company’s sales turnover instead of individual declarations.

Key Features:

Covers domestic and international transit.

Premiums are based on sales turnover, not per shipment.

Eliminates the need for shipment-wise declarations.

Reduces the risk of under- or over-insurance.

Example:

A multinational manufacturing company that ships goods across various continents can use STI to simplify their insurance management while ensuring full coverage.

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Conclusion

Choosing the right type of marine insurance is essential for managing risk and protecting your cargo investment.

Specific Insurance is best for occasional shipments,

Open Cover fits businesses with regular cargo movements, and

Sales Turnover Insurance offers streamlined coverage for high-volume exporters.

Understanding these options helps businesses optimize cost, reduce administrative burden, and ensure smooth operations across global trade routes.