Rate per 100
How cargo premium is quoted: a rate applied to each 100 of insured value.
Definition
Cargo premium is conventionally expressed as a rate per 100 units of insured value — a rate of 0.35 on a sum insured of 250,000 gives a premium of 875 before any minimum premium, loading or adjustment. The rate is built from the commodity's loss history, the clause level, the mode and route, the packing and the deductible.
Why it decides money
Because it scales with value, the same rate on a more valuable shipment is a larger premium, which is right: the exposure scales too.
Related terms
- Sum insured
- The agreed figure the cover is written for, and the ceiling on any payment.
- Minimum premium
- The floor under any single premium, whatever the rate produces.
- Loading
- An addition to the rate for an identified extra exposure.
More in value and premium
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