Open Cover Insurance in Australia: 2025 Guide for Business

For Australian businesses engaged in regular import and export activity, managing risk across multiple shipments is a constant challenge. Open cover insurance has long been a trusted solution, but 2025 brings fresh regulatory updates and market trends that make understanding this product more important than ever. If you’re looking to streamline your cargo insurance while staying compliant, this is your essential guide.

What Is Open Cover Insurance?

Open cover insurance is a flexible policy designed for businesses that ship goods frequently. Unlike single-shipment policies, an open cover agreement provides ongoing coverage for all eligible shipments within a specified period—often a year—without the need to negotiate individual contracts each time. It’s particularly popular among freight forwarders, importers, exporters, and manufacturers with regular cargo movement.

• Continuous protection: Covers all shipments under agreed terms.

• Streamlined admin: No need for repeated paperwork or negotiations.

• Customisable terms: Tailored to your trade routes, cargo types, and risk appetite.

For example, an Australian wine exporter shipping cases to multiple countries each month can use open cover to insure all outgoing shipments, rather than arranging cover for each individual consignment.

Key Benefits for Australian Businesses

Open cover offers several strategic advantages, especially in today’s fast-paced trade environment:

• Cost savings: Insurers often provide better rates for ongoing cover due to predictability and economies of scale.

• Reduced risk of underinsurance: Since coverage is automatically in place, there’s less chance of shipments going uninsured due to oversight.

• Greater flexibility: The policy can be adjusted as your business scales or trade routes evolve.

• Regulatory compliance: Open cover policies are designed to align with Australia’s marine insurance laws, including the Insurance Contracts Act 1984 and updates from the Australian Prudential Regulation Authority (APRA).

In 2025, APRA’s continued focus on digital reporting and real-time risk data means open cover arrangements are increasingly integrated with digital platforms, making it easier to lodge declarations and track coverage in real time.

2025 Regulatory Updates and Market Trends

This year, several developments are shaping how open cover insurance operates in Australia:

• Digital compliance tools: New APRA guidelines require insurers to provide digital interfaces for policy declarations and claims, reducing paperwork and speeding up processing.

• Climate risk considerations: Insurers are placing greater emphasis on climate-related risks (e.g., floods, cyclones) for goods in transit, particularly for routes through the Asia-Pacific. Premiums and coverage terms may be updated to reflect these risks.

• Customs and trade changes: With evolving free trade agreements and biosecurity rules, open cover policies now often include clauses to address delays, inspections, and regulatory holds.

For instance, a Brisbane-based electronics importer now benefits from instant digital reporting of shipments under open cover—complying with APRA’s 2025 mandates and allowing rapid claims if goods are delayed at customs due to new biosecurity checks.

How to Get the Most from Your Open Cover Policy

To maximise value and protection in 2025, businesses should:

• Regularly review coverage: Ensure your policy reflects current shipment volumes, destinations, and cargo types.

• Embrace digital tools: Take advantage of insurer platforms for real-time declarations and claims.

• Negotiate climate add-ons: Consider coverage for extreme weather and supply chain disruptions, which are increasingly relevant in the current climate.

• Stay up to date with regulations: Monitor APRA and Australian Border Force updates to ensure ongoing compliance.

Conclusion

Open cover insurance is more than a convenience—it’s a strategic safeguard for Australian businesses navigating global supply chains in 2025. With regulatory changes, digital innovation, and climate challenges reshaping the landscape, there’s never been a better time to review your coverage and make sure your shipments are protected every step of the way.