How to properly insure your shipments
The decision of whether or not to insure your freight is not always a clear-cut, simple choice. There are many factors to consider, such as the total value of the goods shipped, the shipping origin and destination, the mode of transportation, etc... Once the determination is made, the next question is how to insure the shipment. To assist you in your evaluation, the options below outline the types of coverage available.
Legal Liability:
 If you choose not to pay to insure your shipment, the goods shipped are automatically covered under legal liability standard to the transportation industry. For domestic shipments the coverage is equal to $0.50/LB with a $100.00 minimum provided the cost of the goods is greater than $100.00. In the case of partial loss/damage, only the lost or damaged portion of the freight is subject to the claim settlement amount of $0.50/lb. For international shipments the legal liability set forth by the Warsaw convention is $20.00/kg or the actual value of goods if less than $20/kg.
Insurance of goods only:
To ensure your shipment for the replacement of the goods shipped in case of total or partial loss or damage, request insurance for the replacement value of the goods=commercial invoice value.
PWS sells insurance for $0.60/$100.00 insured value with a $12.00 minimum.
Sample Insurance Calculation:
Commercial Invoice Value = $10,000.00
Insurance Cost: $60.00
Insurance of goods + freight charges:
To ensure your shipment for the replacement of the goods shipped in case of total or partial loss or damage plus the cost of shipping the freight, request insurance for the CIF value of the shipment.
CIF + 10% Terms
(Commercial invoice value + insurance costs + freight= CIF value x 110% (10% for any unforeseen costs or charges).
This type of insurance covers your shipping costs too in the case of damage or loss where the repair or replacement must be done somewhere other than the consignee's location. Recoverable freight charges may be prorated based on the portion of the shipment damaged in the case of partial loss/damage.
If there is damage and the repair occurs at the final destination of the goods (consignee’s facility), no freight charges are refundable.
PWS sells insurance for $0.60/$100.00 insured value with a $12.00 minimum.
Sample insurance of goods + freight charges:
Commercial Invoice value = $10,000.00
Insurance Cost = $60.00
Freight Cost: $500.00
Total CIF Value = $10,560.00 x 110% = $11,616.00 = Amount to Insure
Insurance Cost = $69.70
If you have any further questions, please feel free to contact a PWS representative at 800.727.1085.
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