Most current general circulation models (GCMs) calculate radiative fluxes through partially cloudy grid boxes by weighting clear and cloudy fluxes by the fractional area of cloud cover (C-a), but most GCM cloud schemes calculate cloud fraction as the volume of the grid box that is filled with cloud (C). In this paper, 1 yr of cloud radar and lidar observations from Chilbolton in southern England, are used to examine this discrepancy. With a vertical resolution of 300 m it is found that, on average, C-a is 20% greater than C-v, and with a vertical resolution of 1 km, C-a is greater than C-v by a factor of 2. The difference is around a factor of 2 larger for liquid water clouds than for ice clouds, and also increases with wind shear. Using C-a rather than C, calculated on an operational model grid, increases the mean total cloud cover from 53% to 63%, and so is of similar importance to the cloud overlap assumption. A simple parameterization, C-a = [1 + e((-f))(C-v(-1) - 1)](-1), is proposed to correct for this underestimate based on the observation that the observed relationship between the mean Ca and C, is symmetric about the line C-a = 1 - C-v. The parameter f is a simple function of the horizontal (H) and vertical (V) grid-box dimensions, where for ice clouds f = 0.0880 V-0.7696 H-0.2254 and for liquid clouds f = 0.1635 V-0.6694 H-0.1882. Implementing this simple parameterization, which excludes the effect of wind shear, on an independent 6-month dataset of cloud radar and lidar observations, accounts for the mean underestimate of C for all horizontal and vertical resolutions considered to within 3% of the observed C-a and reduces the rms error for each individual box from typically 100% to approximately 30%. Small biases remain for both weakly and strongly sheared cases, but this is significantly reduced by incorporating a simple shear dependence in the calculation of the parameter f, which also slightly improves the overall performance of the parameterization for all of the resolutions considered.