Application for Ocean Cargo Marine Insurance

Marine Cargo Insurance Application for Ocean Freight

Applying for marine cargo insurance for ocean shipping involves notifying the insurer or insurance agent of the cargo details, transportation route, insured amount, insurance terms, mode of transport, and other necessary information to establish an insurance contract against the risk of cargo damage during international transit.

As a general rule, marine cargo insurance for ocean shipping must be applied for prior to the commencement of the cargo’s transit risk.

However, in the case of ongoing exports, imports, or triangular trade transactions, instead of concluding an insurance contract for each individual shipment, a Blanket Scheduled Insurance contract (Open Policy) may be utilized. This policy pre-agrees on the targeted cargo, transportation route, insurance terms, coverage limits, and other details.

Under an Open Policy, a Confirmation Notice is submitted after the shipment details are finalized for transport covered by the contract terms.

Therefore, in practice when handling Open Policies, it is necessary to confirm the following three stages rather than focusing only on the application for each individual transport:

• Whether the Open Policy itself has been validly concluded
• Whether the relevant transport is included within the scope agreed in the Open Policy
• Whether an appropriate Confirmation Notice has been submitted for the cargo in question

Even with an Open Policy in place, not all cargo is automatically covered without conditions.

Cargo excluded from coverage, amounts exceeding agreed limits, special voyage routes, deck cargo, temperature-controlled shipments, high-value goods, used items, dangerous goods, and similar cases may require individual prior approval.

Additionally, if there is no Open Policy or if the transport in question falls outside the scope of an Open Policy, it may be discovered after transit commencement that insurance application was omitted.

In such cases, if there is evidence such as emails showing the shipper requested insurance placement from the freight forwarder before risk commencement, and a written declaration from the shipper confirming no incident has occurred, it may be possible to negotiate with the insurer for acceptance of a delayed application.

However, having emails or a No Loss Warranty alone does not automatically make the insurance contract retroactively effective.

Acceptance of delayed applications, the timing of insurance coverage commencement, additional conditions, and premiums are subject to the insurer’s individual judgment, and incidents occurring before the application acceptance may be excluded from coverage.

Scope Covered in This Article

Item	Contents Covered in This Article	Matters Requiring Separate Confirmation
Timing of Application	Principle of applying before risk start and delayed applications	Individual underwriting criteria of insurance companies
Individual Confirmed Insurance	Confirmed insurance arranged for each individual shipment	Application forms, underwriting conditions, minimum premiums
Individual Scheduled Insurance	Scheduled insurance arranged for one shipment before all details are finalized	Deadline for Confirmation Notice, estimated amounts, modification conditions
Blanket Scheduled Insurance	Scheduled insurance arranged comprehensively for recurring shipments	Scope of coverage, limits, excluded cargo, settlement methods
Open Policy	Practical operation as a Blanket Scheduled Insurance contract	Agreements and special clauses for individual contracts
Confirmation Notice	Detailed notice of shipments covered by Open Policy	Notification method, deadlines, correction procedures
Delayed Application	Email evidence, no-claim guarantee, insurance company approval	Possibility of retroactive coverage, start of responsibility, exclusion conditions
Insurable Interest	Who bears the economic loss due to cargo damage	Sales contract, governing law, point of risk transfer
Non Policy Method	Administrative method omitting issuance of individual certificates	Alternative documents, L/C compliance, agreement with insurance company
Insured Amount	Setting cargo value, freight, additional charges, desired profit	Agreed insured value in individual contracts
Foreign Currency Conversion	Verification of currency and conversion rates	Official rates by insurance companies, applicable dates
L/C Compliance	Certificate naming, conditions, amount, dates, endorsements	Individual L/C wording, bank review
Corrections and Endorsements	Restrictions on corrections after certificate issuance and post-incident changes	Insurance company approval, incident circumstances
Special Cargo	Temperature control, used goods, dangerous goods, deck cargo, etc.	Special clauses, prior survey, additional premiums
Freight Forwarders	Insurance arrangement agency and scope of responsibility	Scope of mandate, insurance agent qualifications, individual contracts

Application for Marine Cargo Insurance Should Be Made Before Risk Commences

As a general rule, marine cargo insurance must be applied for before the transportation risk for the cargo begins.

In contracts where the insurance period covers from warehouse to warehouse, the risk may commence not simply when the vessel departs, but from the moment the cargo is first moved at the place of origin’s warehouse or similar facility with the purpose of transportation.

Therefore, it is not always sufficient to wait until the following points:

• Until the B/L is issued
• Until the vessel name is confirmed
• Until the vessel departs
• Until the shipping documents reach the importer
• Until the cargo arrives at the import port

When cargo is removed from a factory or warehouse to be transported toward a port, airport, CFS, CY, or similar, the insurance application process must be confirmed before that removal takes place.

Timing of Application and Basic Overview of Insurance Coverage

Situation	Basic Handling	Items to Confirm	Points of Caution
Individual application completed before risk commencement	Contract based on insurance company’s approval conditions	Insurance terms, amount, route segment, cargo	Do not start transportation before underwriting approval
Scheduled individual insurance contracted before risk commencement	Undetermined information is finalized and notified later	Estimated amount, scheduled vessel, scheduled route	Notify promptly after finalization
Transportation covered under a valid Open Policy	Comprehensively managed according to agreed terms	Covered cargo, route segment, limit amount, exclusions	Prevent failure to notify Confirmation Notice
Special cargo excluded from Open Policy	Individual prior approval may be required	Cargo, packaging, transportation method, amount	Do not assume automatic coverage under Open Policy only
Application omission discovered after risk commencement	Consult insurance company as a late application	Request records, presence or absence of accidents, current location	Not automatically retroactively insured
First application made after accident occurrence	Post-accident insurance for known accidents is not allowed	Accident time, time of recognition, application time	Do not conceal the accident when applying

Structure of Insurance Contract Methods

Individual Confirmed Insurance, Individual Scheduled Insurance, Blanket Scheduled Insurance, Open Policy, and the Non Policy method are not concepts at the same hierarchical level.

In Japanese marine cargo insurance practice, Open Policy generally refers to a Blanket Scheduled Insurance contract.

The Non Policy method is sometimes used as an administrative procedure that omits the issuance of individual insurance certificates, rather than representing a separate type of insurance that defines the coverage scope of the contract.

Category	Contractual Position	Main Application Scene	Procedures for Individual Shipments	Main Points of Caution
Individual Confirmed Insurance	Confirmed contract for each shipment	Cargo, value, vessel name, etc. are confirmed	Application and approval before risk commencement	Omission of application each time
Individual Scheduled Insurance	Scheduled contract for each shipment	Partially uncertain vessel name, quantity, value, etc.	Subsequent Confirmation Notice	Differences between scheduled and confirmed details
Blanket Scheduled Insurance	Comprehensive scheduled contract for continuous shipments	Repeated and continuous export, import, and triangular trade	Confirmation notification of applicable shipments	Cargo outside coverage and exceeding limit amounts
Open Policy	Operated as a Blanket Scheduled Insurance contract	Continuous shipments over a year or a fixed period	Individual Confirmation Notices, monthly settlements, etc.	Agreement conditions and notification obligations
Certificate Omission Method	Administrative method omitting issuance of individual certificates	Continuous contracts such as Open Policy	Managed with approval letters, statements, debit notes, etc.	Need for certificates when required by L/C, etc.

Transactions Where Open Policy Is More Important Than Individual Confirmed Insurance

In ongoing export/import operations, import cargo, or triangular trade, finalizing shipment information and communication to the Japanese side tend to be delayed, making insurance omissions more likely if relying solely on individual applications each time.

An Open Policy is a system where the insurance agent and insurer pre-agree on the covered cargo, transportation sections, and other conditions, allowing comprehensive management of continuous shipments within the agreed range.

Open Policy should especially be considered in the following cases:

• Continuous export/import occurs monthly or weekly
• FOB or CFR import shipment information may arrive after transportation has started
• Triangular trade involves direct transport from one overseas location to another
• Multiple branches or departments independently arrange transportation
• The freight forwarder regularly receives insurance requests from the client
• High number of shipments makes insurance omissions likely with individual applications
• Desire to unify cargo, routes, and insurance conditions according to uniform standards
• Preference to settle insurance premiums on a monthly basis

Items to Agree on in Advance under an Open Policy

Agreement Item	Main Content	Examples of Issues	Countermeasures
Contracting Party / Insured	Target corporation, affiliated companies, contracting parties	Overseas subsidiaries are not included as targets	Confirm target companies in advance
Applicable Transactions	Export, import, triangular trade, etc.	Triangular trade excluded from agreement	Add transaction types to the agreement
Covered Cargo	Regular cargo, finished products, raw materials, etc.	Used goods and hazardous goods are excluded	Obtain individual approval
Transport Sections	Place of origin, destination, worldwide, etc.	Transport to sanctioned or high-risk regions	Confirm regional conditions
Transport Mode	Sea, air, land, multimodal transport	Deck cargo and transport by conventional vessels	Check special conditions
Basic Clauses	ICC(A), ICC(B), ICC(C), etc.	Different applicable clauses by cargo	Create a clause table by cargo type
Insured Amount	CIF value equivalent, desired profits, etc.	Calculation methods vary by department	Unify calculation formulas
Single Risk Limit	Limit per vessel, aircraft, transport equipment, etc.	Large projects exceed limit amounts	Obtain approval for increase before risk commencement
Storage Limits	Duration for transshipment or intermediate warehouses	Long-term storage falls outside typical transport	Confirm storage special agreements
Vessel Conditions	Ship class, ship age, ship type, etc.	Old vessels or non-classed vessels	Obtain approval after vessel name is finalized
Excluded Cargo	Cash, precious metals, artworks, livestock, etc.	Staff unaware of exclusions	Share excluded cargo list internally
Confirmation Notice	Notification items, methods, deadlines, correction methods	Omissions or duplicate notifications	Fix responsible staff and deadlines
Premium Settlement	Monthly closing, rates, conversion methods	Errors in currency or amount aggregation	Conduct detailed reconciliation

When Cargo Covered by an Open Policy Becomes Insurable

Under an Open Policy, transport operations that commence during the validity period of the comprehensive contract, involving agreed cargo types, transport routes, limits, conditions, and other requirements, are collectively managed as insured cargo.

The Confirmation Notice, in principle, differs from a new insurance application for each individual shipment starting from zero. Instead, it serves to confirm the details of transport covered under the Open Policy.

However, in some cases, having an Open Policy alone may not be sufficient to handle the situation, such as:

• The cargo does not fall under the agreed cargo types
• The limit per risk is exceeded
• The route passes through countries, regions, or shipping lanes outside the agreement
• It involves special transports such as deck cargo, conventional vessels, or specialized ships
• The cargo consists of used goods, repair goods, or returned shipments
• Special conditions such as temperature control, rust prevention, or leakage prevention are required
• Confirmation is required under sanctions or export controls
• The risk commenced outside the contract period

What Is a Confirmation Notice?

A Confirmation Notice is the procedure of notifying the insurance company or the handling insurance agent of specific transport details such as vessel name, B/L number, cargo, insured amount, and transportation section under an Open Policy or other scheduled insurance contracts.

By submitting a Confirmation Notice, the details specifying which transport is insured, with what amount, and under which conditions, are finalized for insurance management.

Confirmation Notice Item	Main Verification Details	Reference Documents	Impact if Incorrect
Name of Insured	The company or party subject to the contract	Sales contract, Invoice	Discrepancy in claim rights or L/C documents
Cargo Description	Product name, model, purpose, new or used	Invoice, Packing List	Misjudgment of insured cargo or insurance conditions
Insured Amount	Currency, cargo value, freight, desired profit	Invoice, Freight Invoice	Partial insurance or exceeding coverage limits
Transportation Section	Place of origin, loading port, destination port, final destination	B/L, Booking	Discrepancy in insurance period
Transport Means	Vessel name, flight number, transshipment	B/L, AWB	Omission in confirming vessel or route conditions
Risk Commencement Date	Warehouse release date, loading date, etc.	Outbound record, B/L	Misjudgment of contract period applicability
Insurance Conditions	ICC, War, SRCC, specific clauses	Open Policy terms sheet	Different coverage scope in case of an incident
L/C Documents	Requirement of policy, name, endorsement, insured ratio	L/C, bank instructions	Discrepancies in bank documents

Timeline for Confirmation Notice

Timing	Confirmation / Actions	Responsible	Impact of Delay
At Order Placement	Confirm fixed price, insurance obligation, and insurable interest	Sales / Trade Department	Uncertainty over who arranges the insurance
At Booking	Confirm if subject to Open Policy	Logistics / Freight Forwarder	Delay in prior approval for specialized transportation
Before Cargo Release	Confirm risk start date, cargo condition, and packaging	Shipper / Warehouse	Individual applications may start after risk has commenced
Upon Receiving Shipping Information	Finalize vessel name, B/L number, amount, and transport segment	Trade Department / Freight Forwarder	Delay in sending Confirmation Notice
At Confirmation Notice	Match details with Open Policy terms	Insurance Department / Insurance Agent	Overlook cargo outside coverage scope
At Policy Issuance	Verify insured party, amount, currency, terms, and dates	Insurance Agent / Insurance Company	Discrepancies with L/C may occur
At Monthly Closing	Reconcile all transport and Confirmation Notices	Accounting / Insurance Department	Notification omissions remain undetected for extended periods
At Incident Occurrence	Confirm contract scope, Confirmation Notice, and terms	Insurance Department / Insurance Agent	Delay in coverage confirmation and claims handling

When Confirmation Notice of Open Policy Is Delayed

If a valid Open Policy exists and the relevant transport is within the agreed scope, a delay in Confirmation Notice does not automatically mean that the cargo without individual application is treated as uninsured.

However, since Confirmation Notice is an important contractual obligation, any identified delay should not be ignored and must be promptly reported to the insurance company or the handling insurance agent.

Points to confirm include the following:

• Whether the risk began during the Open Policy coverage period
• Whether the cargo, route, and transport mode fall within the agreement scope
• Whether the single risk limit amount has been exceeded
• Whether the cargo is excluded or requires individual approval
• Whether the notification omission was intentional
• Whether an incident has occurred
• Whether incident information was known before the notification
• Whether there is overlap with other notifications

It is not allowed to exploit the omission of Confirmation Notice to selectively notify only cargo involved in a loss after the fact.

Delayed Application and Late Confirmation Notice Are Different

Category	Existing Contract such as Open Policy	Risk Exposure Start	Basic Response
Late Confirmation Notice	Valid comprehensive contract exists	Within contract period	Confirm scope and notify promptly
Missed Individual Application	No existing contract	After risk exposure has begun	Consult insurance company as delayed application
Outside Open Policy Scope	Comprehensive contract exists but cargo excluded	After risk exposure has begun	Request individual special approval
Outside Contract Period	Open Policy before start or after expiration	Outside contract period	Retroactive coverage not always possible
Application After Accident	Regardless of existing contract, after accident recognized	After accident occurrence	New coverage for the accident cannot be issued

If There Is an Insurance Request Email to the Freight Forwarder

There are cases where, although the cargo owner requested the freight forwarder to arrange insurance, the freight forwarder delays the formal insurance application to the insurance company or insurance agent.

In such cases, emails, booking requests, quotation approvals, instructions on insurance terms, etc., that indicate the insurance arrangement request from the cargo owner before the risk commencement are important evidence to confirm the timing and content of the request.

However, an insurance contract with the insurance company is not automatically established solely based on emails between the cargo owner and the freight forwarder.

The freight forwarder should promptly prepare the following documents after recognizing the situation and explain the circumstances to the insurance company or the handling insurance agent.

Documents to Confirm	Contents to Confirm	Practical Significance
Insurance Request Email	Request date and time, cargo, shipment route, terms	To confirm whether the request was made before the risk commencement
Booking Request	Scheduled transport start, vessel name, voyage number	To identify the timing of risk commencement
Insurance Quotation	Terms, rates, intention to apply	To verify the specificity of the request
Invoice / Packing List	Cargo details, value, quantity	To specify the insurance subject
B/L / AWB	Transport route, shipment date, parties involved	To review the progress after risk commencement
Cargo Tracking Records	Current location, transport status	To check the possibility of incident occurrence
No Loss Warranty	Statement acknowledging no awareness of accidents, damage, or abnormalities	To support underwriting decisions for late application
Reason for Delay Letter	Causes for delayed application	To explain that this is not a voluntary or selective insurance arrangement

What Is a No Loss Warranty?

When requesting late insurance application, insurance companies may require written confirmation from the shipper or the insured party, stating that no incidents have occurred and that they are not aware of any information indicating an incident.

In this article, this written statement is referred to consistently as a “No Loss Warranty.”

The No Loss Warranty serves as supporting documentation for the insurance company to consider a late application, but submitting it does not guarantee acceptance of coverage.

Confirmation Item	Details to Include / Confirm	Notes
Subject Cargo	Invoice, B/L, AWB, Container Number, etc.	Avoid confusion with different cargo
Start of Transit	Warehouse gate-out date, shipment date, etc.	Accurately state the point at which risk began
Current Location	In transit, transshipment port, arrived, etc.	Verify latest tracking records
Presence of Incidents	Loss, damage, delay, general average, etc.	Do not withhold confirmed facts
Abnormal Conditions	Vessel accidents, temperature deviations, leakage, breakage, etc.	Report even before formal damage assessment
Confirmation Date and Time	When the no incident status was confirmed	Does not guarantee future incidents
Confirmer	Authorized person of the shipper or insured party	The freight forwarder should not guarantee unilaterally

Commencement of Coverage for Late Applications and Pre-Application Incidents

Even when the insurance company approves a late application, coverage does not necessarily apply retroactively to the start of transport.

In cases where coverage is accepted prospectively, the insurance liability may begin from the time the insurance company or insurance agent receives, approves the application, or another mutually agreed point, excluding incidents that occurred prior to that time.

If it is later determined that an incident occurred before the application was made, that incident will not be covered.

Incident Situation	Basic Viewpoint	Recommended Action
Incident occurred before application; recognized at the time of application	Retroactive coverage for known incidents is not possible	Report the incident transparently without concealment
Incident occurred before application; not recognized at the time of application	Excluded if pre-application incident exemption applies	Verify the incident occurrence time and coverage commencement time
Incident occurred after application but before approval	Coverage may not start simply by receiving the application	Confirm the terms of approval conditions
Incident occurred after coverage commencement	Confirm coverage eligibility based on contract terms	Notify the incident promptly
Incident occurrence time unknown	Confirm the transport segment during which the incident occurred via transport records and survey	Preserve chronological documentation

What Is Insurable Interest?

Insurable interest refers to the relationship where an economic benefit is gained from the safe arrival of cargo, and an economic loss is incurred if the cargo is lost or damaged.

Simply having a company name listed in the Assured field of the insurance policy does not always mean there is an insurable interest.

Who holds the insurable interest should be confirmed comprehensively by considering the sales contract, Incoterms, point of risk transfer, ownership, payment status, transport contract, and other factors.

Party	Situations When Insurable Interest Arises	Documents for Verification	Notes
Exporter	Before risk transfer, payment not yet received, buyer’s insurance failure	Sales contract, Invoice, L/C	Do not judge mechanically based only on the contract price
Importer	FOB or CFR import, after risk transfer	Sales contract, B/L	Insurance arrangement is needed before transport commencement
Trading Company	Triangular transactions, successive sales	Purchase and sales contracts	Separate risk burden between purchasing side and sales side
Bank	When cargo or documents provide collateral interest	L/C, loan agreement, endorsement	Distinguish between Assured and Loss Payee, etc.
Freight Forwarder	When arranging insurance on behalf of customers, not for own cargo	Mandate contract, insurance request	Normally arranges insurance on behalf of the cargo owner’s insurable interest

Contract Value and Insurance Arranger

Contract Value	Typical Insurance Arrangement	Insurable Interest to Confirm	Practical Considerations
FOB Export	Usually on the buyer’s side	Risk burden before and after loading	Confirm the inland section on the exporter’s side separately
FOB Import	Usually on the importer’s side	Cargo interest after vessel loading	Prepare for delays in overseas loading information
CFR Import	Usually on the importer’s side	Interest based on freight-inclusive value	Even if the seller arranges shipping, insurance is on the buyer’s side
CIF Export	Usually on the seller’s side	Insurance interest transferred to buyer	Check L/C conditions and endorsement of documents
CIF Import	Usually arranged by the seller	Seller’s insurance conditions and amount	Consider additional insurance if coverage is insufficient
CIP	Usually on the seller’s side	Conditions required by contract	Confirm transport mode and coverage terms
DAP・DDP	Usually the seller manages an extended range	Interest up to risk transfer point	Specify insurance obligations clearly in the contract
Triangular Trade	Varies by contract	Economic interest of the intermediate buyer and seller	Check actual transport and sales contract separately

What Is the Non Policy Method?

The term Non Policy method varies in usage depending on the insurance company or contract, but generally refers to an administrative procedure where no formal insurance certificate is issued for each individual shipment. Instead, insurance is managed through documents such as Open Policies, Confirmation of Coverage Records, Insurance Approval Letters, Insurance Statements, or Debit Notes.

Not issuing a certificate does not mean that no insurance contract exists.

Also, using the Non Policy method does not exempt the need for Confirmation Notices, premium settlements, or claim notifications.

Document / Record	Main Role	Points to Note
Open Policy	Specifies the basic terms of the blanket contract	Confirm scope and coverage limits
Confirmation of Coverage Record	Finalizes details of individual shipments	Preserve notification number and receipt date/time
Insurance Approval Letter	Confirms underwriting content	Check legal and practical differences compared to insurance certificates
Debit Note	Indicates insurance premiums and settlement amounts	Not necessarily a document that shows coverage details
Monthly Statement	Manages a summary list of notified shipments and premiums	Reconcile with shipment records
Individual Confirmed Insurance Certificate	Used for L/C transactions, submission to counterparties, or assignment of rights	May be requested only for specific cases

Even when an Open Policy is concluded, individual insurance certificates may need to be issued if L/C transactions, submission to banks, assignment of certificates to purchasers, or transfer of claim rights are required.

Items to Confirm Before Application

Item to Confirm	Details to Confirm	Check under Open Policy	Practical Notes
Cargo Details	Product name, quantity, weight, packaging, nature	Whether it falls under agreed cargo	Confirm individual approval for used goods, hazardous goods, etc.
Insured Amount	Cargo value, freight, other charges, desired profit	Agreed calculation formula and limit amount	Confirm if the limit per risk is exceeded
Transaction Type	Export, import, triangular trade	Whether it is a covered transaction	Apply individually for out-of-scope transactions
Transportation Section	Place of dispatch, loading port, destination port, final destination	Whether it falls within agreed regions and sections	Confirm intermediate storage and transshipment
Means of Transport	Ship, air, land, rail	Whether agreed means of transport	Confirm deck stowage and conventional vessels
Incoterms	FOB, CFR, CIF, CIP, DAP, DDP	Whether it fits the agreed insured amount calculation	Separate insurance obligation and insurable interest
Insurance Conditions	ICC, War, SRCC, special clauses	Check cargo-specific condition table	Do not judge solely by the name "All Risks"
Vessel Conditions	Vessel name, classification, vessel age	Whether it meets vessel conditions	Confirm later if details are unknown
L/C	Document conditions, beneficiary, amount, date	Whether document issuance is required	Notification of confirmation alone may be insufficient

Considerations for the Insured Amount

The insured amount may be set not only based on the cargo's invoice value but also by adding freight, insurance premiums, transportation-related charges, desired profit, and other factors.

Under an Open Policy, rather than calculating individually for each cargo, a predetermined formula such as a fixed percentage of the CIF-equivalent value may be used.

Pricing / Scenario	Items to Confirm Regarding Insured Amount	Open Policy Confirmation	Notes
FOB Import	Whether to add freight and other charges to cargo value	Formula converting FOB to CIF-equivalent value	Do not forget to include freight
CFR Import	Whether to add desired profit on CFR value basis	Agreed insured rate	Insurance is often arranged by the buyer side
CIF Import	Whether the seller's insured amount and terms are adequate	Whether additional insurance is applicable	Check for double insurance
CIP Transaction	Insured rate and conditions required by contract	Consistency with agreed conditions	Confirm L/C and sales contract
Triangular Transaction	Whether to base on purchase price or sales price	Agreed valuation method	Avoid double counting of profit
Used Goods	Actual value, repair costs, depreciation	Conditions and valuation methods for used goods	Do not mechanically use new product value
High-Value Cargo	Total per single shipment	Single risk limit amount	Confirm same risk accumulation even in split shipments

Underinsurance and Overinsurance

If the insured amount is set too low, there is a risk that the cargo value, freight, various expenses, and expected profit may not be fully recovered in the event of a loss.

Conversely, setting an amount exceeding the actual insured interest does not result in a profit from cargo damage.

In the case of an Open Policy, it is important to fix the formula for calculating the insured amount to prevent calculation discrepancies between departments or individuals in charge.

Applications in Foreign Currency and Conversion Rates

When applying for insurance in a foreign currency, confirm the insured amount, premium, and the method for converting to Japanese yen at the time of claim payment.

The reference dates such as the Confirmation Notice receipt date, application receipt date, shipment departure date, and the reference bank, T.T.S. rate, or other applicable exchange rates differ depending on the underwriting insurance company or the agreement under the Open Policy.

Items to Confirm	Details to Confirm	Handling under Open Policy
Contract Currency	JPY, USD, EUR, etc.	Agree on the applicable currency
Conversion Date	Application date, notice date, departure date, etc.	Confirm a unified rule
Applicable Exchange Rate	T.T.S., specified rates, etc.	Use the same standard as monthly settlements
L/C Currency	Match with the insurance policy currency	Confirm at policy issuance
Exchange Rate Fluctuations	Difference between contracted rate and rate at claim payment	Check precautions for foreign currency contracts

Points to Note in L/C Transactions

Check Item	Issues in L/C	Handling in Open Policy	Points of Caution
Assured Section	Mismatch with L/C required name	Specify at issuance of individual certificate	Do not confuse policyholder name with insured party name
Insured Amount	Failure to meet required coverage ratio	Compare standard calculation formula with L/C conditions	Obtain approval for increase if insufficient
Currency	Mismatch with L/C currency	Specify currency in individual certificate	Cross-check with Confirmation Notice currency
Insurance Terms	Discrepancies in ICC, War, SRCC, etc.	Present L/C terms to insurance agent	Do not base decision only on basic Open Policy terms
Certificate Date	Date later than shipment date	Request issuance of certificate in advance	Keep evidence of application before risk commencement
Endorsement	Discrepancy in blank endorsement, To Order, etc.	Specify at certificate issuance	Confirm signature authorization
Route / Vessel Name	Mismatch with B/L	Link Confirmation Notice and certificate	Also verify transshipment vessels

Corrections and Endorsements to Insurance Policies

If there are errors in the insurance policy or Confirmation Notice, request corrections from the insurance company or the handling insurance agent.

Changing the insured amount or the insurance terms after an incident has occurred is generally not permitted, as this would extend coverage knowing the damage has already happened.

This principle is based on the fundamental structure of assuming future risks under the insurance contract, where it is unknown whether an incident will occur, and on preventing moral hazard caused by selective post-incident coverage.

Correction Type	Before Incident	After Incident	Verification Items
Incorrect cargo description	Correct after confirming it is the same cargo	Strictly confirm identity	Invoice, Packing List, B/L
Incorrect vessel name or route	Correct to match actual transport	Confirm relationship with incident segment	B/L, Booking
Increase in insured amount	Consult for approval if before risk commencement or incident	Increase related to already occurred damage is not allowed	Reason for increase, presence or absence of incident
Decrease in insured amount	Confirm impact on trade documents	Check relation to claims and L/C	Policy, Debit Note
Name of insured	Confirm insurable interest and correct accordingly	Check that it does not result in transfer of claims	Sales contract, Endorsement
Extension of insurance terms	Obtain approval before risk commencement	Extension after incident is not permitted	Time of change, time of incident

Payment of Insurance Premiums

For Individual Confirmed Insurance, the insurance premium is generally paid at the time the contract is concluded or by the deadline specified by the insurance company.

In the case of an Open Policy, instead of paying the premium for each individual case, premiums may be consolidated based on Confirmation Notices and settled on a monthly basis or other accounting periods.

However, the method of settlement, payment deadline, currency, minimum premium, refund procedures, and other terms may vary depending on the contract.

Monthly Reconciliation of Open Policy

Reconciliation Target	Points to Confirm	Main Documents	Actions in Case of Irregularities
All Export/Import Records	All transport during the target period	Sales, Purchase, and Logistics Ledgers	Extract unreported cases
List of Confirmation Notices	Cases already notified	Insurance company system and details	Check for duplicate notifications
B/L and AWB	Vessel name, date, and transport segment	Shipping documents	Correct erroneous notifications
Invoice	Amount, currency, and cargo details	Sales documents	Correct insured amount
List of Special Cargo	Cargo requiring individual approval	Internal application and approval records	Report any missed approvals
Limit Management	Concentration of risk per vessel or transport unit	Transport list	Subject excess cases to prior approval

Cargo Types to Watch for at the Application Stage

Cargo Type	Main Risks	Matters to Confirm in Open Policy	Documents Required at Application
Fresh and Refrigerated Cargo	Temperature changes, delays, spoilage, thawing	Temperature conditions, freezer breakdown, delay exclusions	Temperature instructions, data logger
Used Goods, Repair Items, Returned Cargo	Pre-existing damage, wear, malfunction	Used goods conditions, exclusions	Photos, inspection records, valuation documents
Precious Metals, Artworks, High-Value Items	Theft, high-value damage, valuation	Excluded cargo, coverage limits	Valuation certification, security plan
Paper, Pulp, Timber	Wet damage, mold, warping, moisture absorption	Wet damage conditions, storage conditions	Packing details, moisture-proof specifications
Steel and Metal Products	Rust, bending damage, abrasion	Rust coverage, pre-shipment condition	Photos, pre-shipment survey
Hazardous Goods, Chemicals, Liquids	Leakage, contamination, reaction, container damage	Applicable cargo, special conditions	SDS, hazardous goods declarations, container specifications
Bulk and Tank Cargo	Shortage, contamination, mixing, measurement discrepancy	Shortage and contamination conditions	Quantity and quality certification, cleaning certificate
Deck Cargo and Special Transport	Wave wetting, falling, improper securing	Deck cargo special clauses, prior approval	Stowage and securing plan, vessel information
Project Cargo	High value, heavy loads, segmented transport	Single risk limit, process management	Transport plan, survey report

When the Freight Forwarder Arranges Insurance

A freight forwarder may, upon the shipper's request, handle the transmission of application information to the insurance company or handling insurance agent, provide Confirmation Notices, and deliver insurance policies.

However, simply being involved in arranging insurance does not mean the freight forwarder guarantees the coverage of the marine cargo insurance, payment of claims, insurable interest, or L/C compliance, etc.

Issue	Main Responsible Party	Freight Forwarder's Role	Supporting Documentation
Insurance Application Details	Shipper / Insurance Policyholder	Accurately receive and transmit the requested details	Email, application form
Determination of Insurance Terms	Insurance Company / Policyholder	Convey options and necessary information	Quotation, terms sheet
Acceptance or Rejection of Risk	Insurance Company	Submit required documents	Approval email, insurance policy
Insurable Interest	Contracting Parties / Insured	Transmit contract price and contract details	Sales contract
Confirmation Notice	Party Obligated to Notify under Contract	Act on behalf within the scope of delegation	Open Policy, notification records
Notification Omission	Responsible Party at Fault	Preserve sequence and evidence	Email, business records
Accident Notification	Insured / Insurance Policyholder	Support prompt notification and document submission	Accident report, photos
Claim Payment Decision	Insurance Company	Does not guarantee decision	Clause, damage documents

Organization by Freight Forwarder's Standard Five Classifications

The following Standard Five Classifications are not legally or industry-wide established categories but serve as an analytical framework within this series to organize the scope of freight forwarder involvement.

Standard Five Classifications	Possible Tasks in Insurance Applications	Judgments/Guarantees Usually Not Included	Documents to Confirm Responsibility Scope	Practical Notes
Simple Intermediary	Transmission of shipper's application data, quotations, insurance policies, etc.	Validity of insurance terms, guarantee of insurance payment	Email, quotation, work instructions	Transmit received content without modification
Cargo Transportation Service Provider	Arrangement of transportation and provision of associated insurance application information	Quality of cargo, insurable interest, guarantee of underwriting approval	Contract of carriage, booking	Notify insurance handler of any changes to transportation terms
NVOCC / House B/L Issuer	Support Confirmation Notice based on House B/L information	Guarantee of insurance payment based solely on issuing House B/L	House B/L, Master B/L, notification records	Verify consistency between actual transportation and Confirmation Notices
Door-to-Door Single Contractor	Integrate information from pickup to delivery and arrange insurance coverage	Final judgment on risk transfer in sales, insurance terms	Door-to-Door contract, carriage clauses	Confirm that all transport segments are covered by insurance
Agent / Coordinator for Specific Operations	Acting on behalf for insurance applications, Confirmation Notices, policy acquisition, accident reporting, etc.	Decisions on conditions beyond delegation scope, insurance company underwriting or payment decisions	Power of attorney, work instructions, application records	Distinguish between delegated tasks and final decision-making

Contracting Carrier and Actual Carrier are concepts indicating legal or contractual status as carriers and do not replace the Standard Five Classifications.

Individual tasks such as sending insurance application information, Confirmation Notices, forwarding insurance policies, obtaining No Loss Warranties, and accident reporting do not constitute a sixth classification on their own.

Cases Often Problematic in Practice

Case	Main Issue	Key Points for Judgment	Initial Response	Main Documents
Delay in Notification of Open Policy Confirmation	Violation of Notice Obligation; Coverage Confirmation	Within agreement scope? Before risk commencement?	Report promptly to the insurance company	Open Policy, Notification List
Individual Application by Freight Forwarder Omitted	Insurance Contract Not Established	Evidence of request before risk commencement	Obtain a No Loss Warranty and consult	Email, B/L, Guarantee Letter
Used Machinery Outside Open Policy Coverage	Excluded Cargo; Insufficient Conditions	Condition for used goods and prior approval	Request individual underwriting	Photos, Inspection Documents
Exceeded Single Risk Limit Amount	Uninsured Portion Exceeding Limit	Aggregation on same vessel or warehouse	Obtain approval for increase before risk commencement	Transport List, Amount Details
Failure to Notify Deck Cargo	Unapproved Special Transport Conditions	Agreement and special clause on deck cargo	Notify insurance company before loading	B/L Draft, Loading Plan
No Issuance of Certificates for L/C	Insufficient Banking Documents	Non Policy method and L/C conditions	Issue individual certificate	L/C, Confirmation Notice
Request to Increase Insured Amount After Accident	Extension of Coverage for Known Accident	Accident time and change request time	Consider claim based on amount before accident	Email, Accident Report
Triangular Cargo Not Covered by Contract	Omission of Trade Type in Agreement	Contractor, Insured Party, Segments	Revise Open Policy terms	Sales Contract, B/L

Example 1: When Confirmation of an Open Policy Occurs After Vessel Departure

A Japanese importer handles numerous FOB import shipments monthly and had concluded a marine cargo insurance Open Policy.

The relevant cargo, transport segments, ICC clauses, insured amount calculation formula, and single risk limit were pre-agreed within the Open Policy.

At the time the shipping documents arrived from the overseas seller, the vessel had already departed the load port.

The responsible person assumed that insurance application was no longer possible solely because the vessel had departed.

However, the transport started within the Open Policy’s contract period, and the cargo, route, amount, and mode of transport all fell within the agreed terms.

The insurance officer promptly submitted a Confirmation Notice under the Open Policy, specifying the vessel name, B/L number, invoice amount, transport segment, and other details.

In this case, instead of newly concluding an individual insurance contract after vessel departure, the procedure is treated as confirming the relevant shipment under the existing Open Policy.

However, this procedure cannot be applied if the shipment is outside the Open Policy scope or exceeds the coverage limits.

Example 2: When the Freight Forwarder Neglects to Submit the Insurance Application

The cargo owner emailed the freight forwarder three days before cargo gate-out, requesting arrangements for maritime transport and marine cargo insurance.

The email included the cargo description, invoice amount, origin, destination, and the desired insurance terms.

The freight forwarder completed the transport booking but forgot to submit the insurance application to the insurer or insurance agent, and the omission was discovered after cargo gate-out.

The freight forwarder had retained the email from the cargo owner requesting insurance coverage before the risk commencement, booking records, B/L draft, and cargo tracking information.

Therefore, the freight forwarder obtained a No Loss Warranty from the authorized representative of the cargo owner, confirming no knowledge of accidents, damage, general average, temperature abnormalities, or other incidents concerning the cargo, and consulted the insurer about underwriting the policy along with a letter explaining the delay.

The insurer reviewed the cargo’s current location, accident information, and cargo details, and offered terms to underwrite coverage only from the date of policy acceptance onward.

In this case, the prior email from the freight forwarder serves as evidence of the arrangement request but does not itself establish a contract with the insurance company.

Moreover, any incidents discovered later that occurred before the insurance application was accepted will not be covered by the insurance.

Example 3: Notification of Used Machinery Not Covered by the Open Policy

The importer usually imports new machinery and had agreed under the Open Policy that new machinery would be the insured cargo.

This time, the importer brought in used machine tools purchased at an overseas auction, but the responsible person submitted a Confirmation Notice in the same manner as for regular machinery imports.

Before the accident occurred, it was confirmed that the Open Policy’s terms included used goods, repaired items, and returned cargo as subject to individual approval.

The insurance company requested photos before shipment, operational inspections, packaging condition, purchase price, and repair history, and granted individual approval excluding pre-existing damages and functional defects.

Even when an Open Policy is in place, cargo excluded from the agreed coverage does not automatically become insured under standard terms.

Example 4: When the Total Amount Exceeds the Limit for Multiple Cargoes Loaded on the Same Vessel

A trading company loaded high-value parts from multiple overseas factories onto the same vessel.

Although the amount for each shipment was within the individual management limit of the Open Policy, the total amount of cargo loaded on the same vessel exceeded a single risk limit.

Each department in charge only reviewed the invoices under their responsibility and did not realize that the total company-wide amount had exceeded the limit.

Because monthly reconciliation was too late, the insurance officer aggregated booking information and changed the system to manage risk concentration on a vessel-by-vessel basis.

For subsequent large shipments, the total insured amount was notified to the insurance company before loading, and approval for an increased limit was obtained.

The Open Policy limit may be set not per individual invoice but per risk aggregation unit such as one vessel, one aircraft, one transport equipment, or one storage location.

Example 5: When an L/C Insurance Certificate Is Required Despite Using the Non Policy Method

The exporter had concluded an Open Policy and was operating under the Non Policy method, which does not issue individual insurance certificates for regular export cargo.

For a new transaction, L/C payment was adopted, and as a condition of the L/C, presentation of a transferable insurance certificate specifying the designated sum insured, currency, ICC, War, and SRCC clauses was required.

The person in charge assumed that a Confirmation Notice copy would suffice for bank presentation since there was an Open Policy.

However, the Confirmation Notice record was not accepted as a substitute for the insurance certificate required by the L/C.

The exporter submitted the L/C, Invoice, and B/L Draft to the insurance agent, who issued an individual insurance certificate matching the L/C requirements, including the Assured section, currency, coverage rate, vessel name, route, and endorsement method.

The Non Policy method is an operation that omits the issuance of certificates, but it does not eliminate the need to issue certificates when business partners or banks request them.

Common Misunderstandings

Misunderstanding	Actual Understanding	Practical Points of Attention
All cargo is automatically covered if there is an Open Policy	Coverage applies only to agreed cargo, routes, limits, and conditions	Confirm excluded cargo and cargo requiring individual approval
Open Policy and Scheduled Insurance are completely separate systems	An Open Policy operates as a Blanket Scheduled Insurance contract	Verify the differences from individual scheduled insurance
Insurance starts only from the point of the Confirmation Notice	Open Policies determine coverage based on existing contracts and the risk commencement point	Check contract conditions and notification obligations
No report is needed even if the Confirmation Notice is delayed	If a delay is discovered, prompt reporting is required	Confirm scope of coverage and presence of any incidents
Insurance contracts are concluded simply by sending a request email to the freight forwarder	Application and approval by the insurance company or authorized insurance agent are necessary	Retain records of application acceptance
Submitting a No Loss Warranty always results in retroactive coverage	A No Loss Warranty is material for underwriting decisions but does not guarantee approval	Confirm the effective start of responsibility
Accidents occurring before application can be covered retroactively	Late applications may exclude accidents that occurred before application	Check the timing of the accident and application
Non Policy method means there is no insurance contract	This method manages coverage via comprehensive contracts without individual certificates	Keep records of contracts and notifications
With the Non Policy method, certificates are unnecessary even for L/C	If the L/C requires insurance certificates, individual issuance is necessary	Confirm L/C conditions in advance
If a name appears in the Assured section, there is an insurable interest	An economic interest related to cargo damage must be established	Verify sales contracts and risk transfer points
Insurance amounts can be increased even after an accident	Post-accident expansion of coverage for known incidents is not allowed	Confirm amounts before the accident
All Risks coverage also includes loss due to delay	Losses caused by delay are generally excluded	Confirm causal relationship with physical damage
If the freight forwarder arranges insurance, payment is guaranteed	Acceptance and payment decisions rest with the insurance company	Clearly define the scope of agency authority
If individual reported amounts are within limits, total limits cannot be exceeded	Assessment may consider risk accumulation on the same vessel, location, etc.	Manage all company shipments under centralized oversight

Open Policy Operational Decision Flow

1. Confirm whether a valid Open Policy exists.
2. Check if the risk commencement date falls within the contract period.
3. Determine whether the coverage applies to export, import, or triangular trade.
4. Verify that the cargo type falls within the agreed scope.
5. Confirm whether individual approval is required for used goods, hazardous materials, high-value items, etc.
6. Check if the transportation segments, countries, and routes are covered.
7. Review transportation conditions such as vessel, air, land, or deck cargo loading.
8. Confirm the single risk limit and aggregation of risks.
9. Identify the parties holding insurable interest.
10. Calculate the insured amount based on the agreement’s formula.
11. Check if an insurance certificate for L/C purposes is required.
12. Submit a Confirmation Notice and retain acceptance records.
13. Monthly, reconcile transportation results with Confirmation Notices.
14. If any notification omissions occur, confirm accident status and report immediately.
15. If outside the Open Policy scope, request individual underwriting.

Decision Flow for Late Application

1. Confirm whether there is an existing insurance contract such as an Open Policy.
2. Distinguish whether the delay is due to a late Confirmation Notice or an omission of individual application.
3. Confirm the start date and time of the cargo's risk exposure.
4. Confirm the date and time when the insured party received the request for insurance from the cargo owner.
5. Retain evidence such as emails, application forms, and quotation approvals.
6. Confirm the current location of the cargo.
7. Verify information regarding accidents, damage, delays, general average, etc.
8. Obtain a No Loss Warranty from an authorized person of the cargo owner or insured party.
9. Submit a letter explaining the reason for the delay and related documents to the insurance company.
10. Confirm acceptance or rejection by the insurance company and the effective start time of liability.
11. Check whether accidents occurring before the application are subject to exclusion.
12. Keep a written record of the approval details.

Application and Confirmation Notice Checklist

Check Stage	Counterparty / Documents	Check Items	Actions if Problems Arise
At Sales Contract	Sales Contract, Incoterms	Insurance obligation, risk allocation, insurable interest	Document contract terms clearly
At Open Policy Conclusion	Insurance Company, Insurance Agent	Cargo, coverage section, terms, limits	List exclusions and individual approvals
At Order Acceptance / Placement	Invoice, Purchase Order	Cargo, amount, currency	Notify insurance personnel of special cargo
At Booking	Freight Forwarder, Shipping Line	Vessel name, route, deck loading, etc.	Obtain approval for special transport
Before Cargo Dispatch	Warehouse, Cargo Owner	Risk start date, cargo condition	Complete individual application
At Confirmation Notice	Insurance Company System	Vessel name, B/L, amount, coverage section, terms	Save acceptance results
At L/C Certificate Issuance	L/C, Bank, Insurance Agent	Insured party, currency, insurance rate, endorsement	Verify before certificate issuance
At Monthly Reconciliation	Logistics Ledger, Confirmation Notice List	Missed notices, duplicate notices, amount discrepancies	Correct and report immediately
When Delay is Identified	Email, B/L, Tracking Records	Request time, risk start, presence of accident	Obtain a No Loss Warranty and consult
When Accident Occurs	Insurance Policy, Open Policy, Notification Records	Affected cargo, terms, liability start point	Notify accident promptly

Situations Requiring Consultation with Experts

• When the cargo or transport segments covered by the Open Policy are unclear
• When Confirmation Notices are delayed for an extended period
• When there is a possibility that accident information was known before notification
• When it is discovered that the freight forwarder failed to submit an application
• When the content or verifier of the No Loss Warranty is unclear
• When the start point of liability for late application is unknown
• When it is not possible to distinguish between accidents occurring before and after the application
• When exceeding the single risk limit amount under the Open Policy
• When transporting used goods, hazardous materials, deck cargo, high-value items, etc.
• When the insurable interest in triangular trade is unclear
• When relationships between the Assured, Loss Payee, and Certificate Endorsee are unclear
• When L/C conditions do not correspond with the basic conditions of the Open Policy
• When correction of certificates or insured amount increases are requested after an accident occurs
• When disputes arise regarding the freight forwarder's responsibility for arranging insurance

Points to Note

• Marine cargo insurance for foreign-going cargo must, in principle, be applied for before the commencement of risk.
• The commencement of risk for the cargo may occur at warehouse release before the vessel departure.
• An Open Policy is a contract that comprehensively agrees on conditions for continuous transportation.
• An Open Policy does not automatically cover all cargo unconditionally.
• Check the covered cargo, transportation segments, insurance terms, single risk limit, and excluded cargo.
• Under an Open Policy, Confirmation Notice should be submitted promptly after the shipment details are finalized.
• Distinguish between delayed notification and omission of individual applications.
• A contract with the insurance company is not automatically established by an email from the shipper to the freight forwarder.
• In case of delayed application, verify evidence of the insurance request, reasons for delay, current cargo location, and presence or absence of incidents.
• A No Loss Warranty document does not automatically confirm the insurance company’s underwriting.
• Even if a delayed application is approved, losses occurring before the application may be excluded from coverage.
• After recognizing an incident, insurance cannot be obtained covering that incident.
• The insurable interest is determined not only by the name in the Assured section but also by the economic disadvantage due to cargo damage.
• The Non Policy method omits issuance of individual certificates as an administrative procedure.
• If an L/C requires an insurance certificate, individual certificates may be necessary even under an Open Policy.
• Increases in insured amounts or expansion of coverage conditions after an incident are not permitted.
• The freight forwarder must accurately record and relay the shipper’s request details.
• The freight forwarder should not guarantee the insurance company’s acceptance or payment of claims.

Summary

• Marine cargo insurance is, as a general rule, applied for before the cargo’s transport risk begins.
• When the insurance period covers warehouse-to-warehouse, the commencement of risk may occur when the cargo is moved out before the vessel’s departure.
• If the details are finalized for each shipment, Individual Confirmed Insurance is used.
• If details such as vessel name, quantity, or value are not finalized for a shipment, Individual Scheduled Insurance may be available.
• For continuous exports/imports or triangular trade, an Open Policy—an Blanket Scheduled Insurance contract—is effective in preventing insurance omissions.
• With an Open Policy, the target cargo, transport segments, insurance clauses, limits, and excluded cargo are pre-agreed.
• An Open Policy is not a contract that automatically and unconditionally covers all cargo.
• Used, dangerous goods, high-value goods, and deck cargo may require individual approvals.
• It is necessary to confirm that the risk begins within the Open Policy period and that the transport is within the agreed scope.
• A Confirmation Notice procedure notifies vessel name, B/L, cargo, amount, transport segment, etc., for individual shipments under the Open Policy.
• The Confirmation Notice differs from a new insurance application that concludes a contract from scratch for each shipment.
• If Confirmation Notices are delayed, check the scope and whether any incident occurred, and promptly report to the insurance company.
• It is necessary to distinguish between delayed Confirmation Notices under an Open Policy and omissions of individual applications without an Open Policy.
• If the freight forwarder received an underwriting request from the shipper before the risk started, evidence such as emails can be crucial for delayed applications.
• However, correspondence only between shipper and freight forwarder does not automatically establish an insurance contract with the insurance company.
• For delayed applications, it may be possible to obtain a No Loss Warranty from the shipper and consult the insurer on acceptance.
• The No Loss Warranty serves as documentation for underwriting review and does not guarantee retroactive coverage.
• Underwriting decisions, responsibility commencement, and additional conditions for delayed applications are determined individually by the insurer.
• If underwriting is agreed going forward, incidents occurring before application acceptance may be excluded.
• If pre-application incidents come to light later, they are also excluded if the policy excludes pre-application incidents.
• You cannot apply for insurance afterwards for an incident already known to have occurred.
• Insurable interest means a relationship in which economic loss arises from cargo damage.
• Mere listing of a company name in the Assured section does not always confirm insurable interest.
• Insurable interest should be confirmed from sales contracts, risk transfer, payment, ownership, and related factors.
• Under an Open Policy, the calculation method for insured amounts, single risk limits, currency, and conversion methods are managed uniformly.
• Risk concentration on the same vessel or at the same storage location may lead to exceeding limits.
• The Non Policy system is an administrative method to omit issuing individual insurance certificates.
• Even under the Non Policy system, Confirmation Notices, premium settlements, and incident notifications are required.
• If an L/C requires an insurance certificate, individual certificates are issued even under Open Policy or Non Policy systems.
• In L/C transactions, review the Assured, the insured amount, currency, insurance clauses, certificate date, and endorsements.
• Increases in insured amount or extension of insurance scope after an incident are regarded as retroactive coverage of a known incident and are not accepted.
• When the freight forwarder arranges insurance on behalf of the shipper, keep records of the request details, application time, submitted documents, and acceptance results.
• The freight forwarder does not guarantee the insurer’s underwriting or claim payments.
• Under the Standard Five Classifications, insurance application agency services are mainly classified as Simple Intermediary or Agent / Coordinator for Specific Operations.
• Contracting Carrier and Actual Carrier describe contractual transport positions and do not replace the Standard Five Classifications.
• Individual tasks such as Confirmation Notices, policy transfers, and obtaining No Loss Warranties do not themselves constitute a sixth classification.

For continuous exports/imports or triangular trade, please prepare in advance the management of Open Policy target cargo, transport segments, insurance clauses, limits, excluded cargo, and the operation of Confirmation Notices beyond mere repeat individual applications.

If a freight forwarder’s omission of insurance application becomes apparent after transport starts, promptly consult the insurer by collecting risk-start prior insurance request emails, transport documents, delay explanations, and a No Loss Warranty from the shipper.

Even if delayed applications are approved, always confirm the responsibility start point and exclusions of pre-application incidents, and do not apply retroactively knowing an incident has already occurred.

This article provides general information about marine cargo insurance application, Individual Scheduled Insurance, all-encompassing prospective contracts, Open Policy, Confirmation Notice, delayed application, No Loss Warranty, insurable interest, Non Policy system, L/C handling, and freight forwarder insurance arrangement practices. It does not determine the establishment of contracts for individual cargo, retroactive coverage, responsibility commencement, claim payments, insurable interest, policy validity, or legal liability of parties. Actual handling should be confirmed based on Open Policy, insurance certificates, standard and special clauses, Confirmation Notice terms, sales contracts, Incoterms, L/C, application records, and approvals by insurance companies and insurance agents.