Are open cargo policies issued to freight forwarders limited to specific types of bills?

An open cargo policy is a type of insurance policy designed for freight forwarders, allowing them to cover multiple shipments under a single insurance agreement. This flexibility is essential for freight forwarders who handle various types of shipments regularly. However, these policies are not universally applicable to all billing types without limitations.

The correct answer emphasizes that open cargo policies are issued to freight forwarders with specific conditions tied to the types of bills they use. While freight forwarders can broadly cover different types of cargo, the policy itself can be tailored to apply to particular bill types, such as house bills of lading or air waybills. This tailoring ensures that the policy appropriately covers the risks associated with the various modes of transportation and the corresponding documentation practices in the industry.

Different billing types reflect different procedures in the logistics chain, and open cargo policies can indeed be designed to limit coverage to certain types of bills. This limitation allows the insurance provider to manage risk more effectively and aligns with industry standards, ensuring that the coverage provided is relevant to the specific operations of freight forwarders. Understanding this relationship is crucial for ensuring compliance and effective coverage while undertaking shipping activities.