Although I have addressed this issue in a previous column, it warrants updating due to its importance especially at this time of year. The short answer to your question is that if it comes down to one or the other, a properly designed and installed fence is better than a cover.
Fences are superior when they are equipped with a self-closing gate which allows convenient adult access but prevents a child from doing so. The gate should slam shut behind you each and every time you leave the pool area. This is a great safety feature as it is easy to leave a pool unprotected when running to answer the door or phone or just stepping away for a "few minutes."
Mechanical covers do act as a barrier, but they are not as readily opened and closed as a gate. Hence, people tend to leave the cover all the way open or all the way closed and may not be likely to close it if they are stepping away for a short time. Some parents get a sense of safety when the see that their toddler can crawl on top of a closed cover. Unfortunately, it is a false sense as doing so may teach the child that they can crawl on water. Also, covers tend to pond water on top of them in the winter time or from sprinklers which can also be a hazard.
To further my case, the Worldwide Safe Kids Coalition just issued new pool safety guidelines that only recommended fences without mentioning covers at all. This being said, having a cover as well as a fence is terrific; and many families elect to have both.
As usual, there is more to be said on this topic. The medical and safety community have come together on this topic and agreed that the best way to prevent children from drowning is adult supervision and barriers, barriers and more barriers.
Besides fences and covers, barriers include secondary latching on doors and windows leading from the home to the yard. All windows should be latched to not open more than four inches so as to prevent a child from pushing through a screen to gain access to the yard and pool.
I am not an advocate for pool alarms and monitoring devices as they are reactive and not all that reliable. I do however encourage families with pools or other water features to consider adding a burglar alarm with a chime function that sounds a subtle alert any time an exterior door or window is opened.
Finally, remember that swimming lessons are not a substitute. Children do not have the cognitive development to save themselves consistently until at least the age of four. I do not discourage lessons at an earlier age; I only encourage parents to not get a false sense of security from them.