Quick Tip #51
The link between insurance premiums and risk
There are many factors which affect the pricing of your insurance premium, but all revolve around the risk involved. For example, the longer the transit time, the more time available for something negative to happen.
Shipping to certain countries or areas of the world involves greater risk. Lesser developed countries might have political unrest or port loading/unloading facilities not up to standard. Perishable or certain products prone to theft both involve higher risk. The higher the risk, the higher the cost of your insurance premium.
When requesting a cargo insurance rate for your product, provide as much information as possible with the key points being:
- Cargo type (full product description of the goods, value, perishable, etc.)
- Packaging detail (loose cartons, pallets, bulk, reefer, full container load or truck load or less than container or truck load, etc.)
- Method of transport & transit time (air, ocean or truck)
- Routing information (origin, destination, port facilities, etc.)
- Security detail (package markings, warehouse security measures, etc.)
- Past experience of both the shipper and consignee (cargo claims history, past record of damages or theft, etc.)
With this information, the insurer will be able to properly assess the level of risk (susceptibility to damage, loss and theft) associated with your product and offer the best possible cargo insurance premium rate.
