Definition
A running policy is a type of insurance contract designed to cover a shifting, indefinite, or continuously changing set of insured subjects under a single ongoing agreement. Rather than specifying the exact goods, locations, or values at the time the policy is issued, a running policy permits those particulars to be defined, adjusted, and updated over time through additional statements or endorsements added to the policy or recorded in an attached register.
Running policies are most commonly used in commercial contexts where the insured's inventory, cargo, or stored goods fluctuate regularly — for instance, a merchant whose stock in warehouses varies in quantity and location from week to week. The policy remains in force continuously, with coverage attaching to whatever qualifying subjects are designated at any given time, at premiums and amounts agreed upon incrementally.
Why It Matters in Research
Researchers working in insurance law, commercial law, or early American business history will encounter running policies primarily in contexts involving merchants, warehousemen, and shippers whose insurable property was inherently variable. The defining characteristic — that coverage is not fixed at inception but defined piecemeal — distinguishes running policies from standard open policies and specific policies, and the distinction has practical consequences for coverage disputes, valuation, and premium calculation.
The primary trap in historical sources is terminological blurring. Older treatises and cases do not always clearly distinguish running policies from open marine policies or floating policies, and the terms are sometimes used interchangeably. In marine insurance law especially, "floating policy" and "running policy" may describe overlapping but not identical instruments. Researchers should read the operative contract language rather than relying solely on the label used.
The California Civil Code section referenced in all three dictionary sources (§ 2597) reflects early statutory codification of insurance law in California, making that jurisdiction's case law and legislative history disproportionately influential on how the term was defined in American legal reference works. Researchers should be aware that the definition in Black's and Bouvier's essentially tracks this single statutory source, so the entry carries a jurisdictionally narrow origin even when it appears in general dictionaries.
Because the insured subjects and amounts are fixed incrementally, coverage gaps and disputes about what was "on risk" at a particular time are a recurring issue in running policy litigation. Historical cases often turn on whether a particular lot of goods had been properly endorsed onto the policy before loss occurred.
Historical Dictionary Support
All three sources — Black's (1st Ed.), Black's (2nd Ed.), and Bouvier's — are substantially in agreement, to the point of near-verbatim alignment. Each defines a running policy as one contemplating successive insurances with the insured subjects defined over time through additional statements or endorsements. This uniformity reflects the fact that all three draw from the same statutory source, California Civil Code § 2597, rather than from independent common-law synthesis.
Bouvier adds the most operational detail, specifying that the policy covers "such goods, at such amounts of insurance, in such storehouses and places, and at such rates of premiums, as from time to time shall be agreed upon and indorsed on the policy or in a book attached thereto." This elaboration is practically useful: it confirms that the running policy is not merely an open framework but a structured agreement where each increment of coverage is affirmatively recorded.
Black's 2nd Edition adds a case citation — Corporation of London Assurance v. Paterson, 106 Ga. 538 (1898) — which is absent from the 1st Edition. This represents the only case authority offered across the three sources and provides a contemporaneous judicial treatment of the concept.
What the historical sources do not address: the relationship between running policies and the duty of disclosure for newly added subjects, the interaction with subrogation rights across multiple endorsement periods, or how running policies function in the context of concurrent insurance. Researchers needing those angles will need to move beyond dictionary definitions into treatise and case law sources.
Jurisdictional Note
The American dictionary definition of running policy traces substantially to California's statutory codification. Other jurisdictions, particularly those following English marine insurance practice, may use "floating policy" as the functional equivalent, with somewhat different rules governing declaration and attachment of coverage. Researchers working outside California or in admiralty contexts should verify local usage before treating these terms as synonymous.