Minimum premium
The floor under any single premium, whatever the rate produces.
Definition
A fixed amount below which a risk is not worth writing, because issuing the certificate, holding the exposure and handling a possible claim cost more than the rated premium would bring in. On small consignments the minimum, not the rate, is what you actually pay.
Why it decides money
It is why the premium on a small shipment does not look proportionate to the premium on a large one, and why open cover with periodic declarations is cheaper for a business shipping frequently.
Related terms
- Rate per 100
- How cargo premium is quoted: a rate applied to each 100 of insured value.
- Open cover
- A standing contract that covers every shipment you declare under it.
More in value and premium
InsuranceScanner is an insurance intermediary, not an insurer — see the Terms for our role. Nothing here is a personal recommendation that a particular cover, sum insured or deductible is suitable for you. Where anything on this page conflicts with the certificate, policy schedule or wording issued by an insurer, that document governs.