“Per bottom limit” is an important feature of an open cover marine insurance policy. An open marine insurance policy describes the cargo, voyage, and the insurance cover in general terms. It will naturally take care of all the shipments which fall under its scope. Issued for 1 year, this policy is renewable annually and can be canceled by either insured or insurance provider on giving notice. So, an open cover is a promise for ensuring the security of the future shipments about which specific details are not available in the present times. This open cover marine insurance policy is useful for those who make large exports and imports regularly such as import/export merchants, banks, buying agents, contractors, a shipping firm, etc. 

The open cover marine insurance policy would have “Limit of liability” which is an agreed condition. According to this, the insurance provider agrees to the maximum sum insured and would not be liable for any shipment where the sum assured exceeds the agreed limit. “Limit of liability” is further based upon various factors such as the ones which are mentioned below.

  • Per bottom limit
  • Location limit
  • Conveyance
  • Voyages and cargoes


Per Bottom Limit Explained

The “per bottom limit” states the maximum amount for which your insurance provider would be liable in case of claims. This is the maximum anticipated value of the cargo on a ship and any value which is above this limit is not intended to be covered under the marine insurance policy unless amendments are being made into the policy along with prior information to the insurance provider.  This rule is applicable when the goods are in an ordinary transit course. 

The maximum amount which would be provided by your insurance provider must be a figure larger than the shipment’s actual value.  Usually, it is a thumb rule that the limit of the policy would be at least twice the size of a large shipment. This is because there is a huge possibility of two shipments being sent in the same conveyance or arriving at the destination together, etc. The term “per bottom limit” is a phrase that was being used in olden times. It mainly refers to the bottom of the ship or the hull of the ship. Nowadays, the term “Conveyance limit” is quite commonly being used and can refer to any means of conveyance like roads, rail, air, etc.  

Hence, the “per bottom limit” is also known as the “sending limit” and the premium of the marine insurance policy is also calculated based on its sending limit as well.