WHETHER A DECLARATION UNDER AN OPEN COVER IS ACCEPTABLE IN LIEU OF AN INSURANCE CERTIFICATE

QUESTION

Dear Mr. Old Man,

If LC requires an insurance certificate, is a declaration under an open cover acceptable and vice versa?

Thank you.

Best regards,

TD

————

ANSWER

Hi,

It is understood from sub-article 28 (d) UCP 600 that where an LC calls for  an insurance certificate or a declaration under an open cover, presentation of an insurance policy is acceptable but not vice versa, i.e., an insurance certificate or a declaration under an open cover is not acceptable in lieu of an insurance policy.

Regarding your question, to tell the truth, I haven’t found any reliable sources saying that a declaration under an open cover is acceptable in lieu of an insurance certificate and vice versa though it appears so.

In LC forums I have come across divided opinions on this issue. Perhaps we need an official opinion from ICC.

However, pending ICC’s official opinion as to whether insurance certificate and declaration under an open cover can be presented interchangeably, where LC requires presentation of an insurance certificate, such a certificate should be presented to comply with the LC requirement. A declaration under an open cover may not be acceptable in lieu of an insurance ceritificate and vice versa.

Kind regards,

Mr. Old Man

P/s: For your information, I hear that CDCS exams have a similar question and the correct answer given is that a declaration under an open cover is acceptable in lieu of an insurance ceritificate and vice versa. I have not yet checked this information.