Cover

When placing a waypoint for movement, a cyan shield icon may be splashed by the HUD onto the side of a nearby object or wall. This indicates that the character will shoulder into cover there. The shield will be completely cyan if the object provides hard cover, and only half-filled with cyan if the object is soft cover. When the movement is confirmed, the character will end their move by turning and placing their back against the cover. Cover will provide extra protection to the character by decreasing accuracy of enemy attacks, but only against sightlines that pass through or over the cover.

When ending your turn against any cover with at least 1 AP remaining, you will automatically "take cover", granting defensive bonuses. (You can also manually select this option for 1 AP.)

Enemies also take advantage of cover and gain the same benefits as mercs.

In the HUD when preparing a movement, the Snap option toggles whether the movement endpoint will automatically jump to nearby cover, with the cyan shield option. If Snap is turned off, the movement does not jump and moving the cursor provides better fine-tuned control of a movement endpoint near cover. Unfortunately, this may also mean that the merc does not get the benefit of cover if the endpoint is not close enough.

Hard Cover

Hard cover is provided by concrete barriers, large crates, and other objects largely impenetrable to weapon fire. Hard cover gives 50% protection to the character, i.e. -50 on any attack roll against the character.

Soft Cover

Soft cover is provided by forklifts, small crates, shelf units, and other things that provide less of a barrier to weapon fire. Soft cover gives 25% protection to the character, i.e. -25 on any attack roll against the character.

Obstruction

Objects which lie between the character and an attacker provides a small amount of protection even if the character is not tucked up against it. This kind of Obstruction provides 10% protection (i.e. -10 on any attack roll against the character) regardless of whether the object is considered hard or soft to weapon fire. A character can benefit from both Hard or Soft cover and Obstruction if the character is tucked into cover and there is also an Obstruction in the sightline. If a character is behind cover but did not get the cyan shield icon when preparing the movement, the character is not tucked into cover and will only get the 10% Obstruction protection.

Walls

The HUD will splash the shield icon onto walls and tall solid objects and the character will tuck up with their back against it. Technically, the character generally does not get a cover bonus from this because sightlines through the wall or tall object will be completely blocked. You get the same protection from the wall whether or not you are tucked up against it--attacks are completely blocked. However, a tall object does provide Hard Cover (50% protection) in some cases where an enemy on a higher platform can fire down over the top of a tall object.