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Answer We charge a single rate based on your sales that covers you for incoming and outgoing shipments. Comparison with a Conventional Insurance Plan: ERAI Member $5,000,000 sales Margin: Assume 25% Existing Rate to Insure (example) .20% (Note: This rate is representative of what a good private insurance carrier might charge a firm of this size.) Cost to cover incoming shipments: $5,000,000 x .75 (margin adjustment) x .0020 = $7,500 Cost to cover outgoing shipments: $5,000,000 x .0020 = $10,000 Total cost to cover incoming and outgoing shipments: $17,500 High Tech Cargo Insurance Program (example) $5,000,000 *.20 = $10,000 Savings: $7,500 or 43% less Answer Comparison with a Shipping Company Insurance Plan: ERAI Member $5,000,000 sales Margin: Assume 25% Existing Rate to Insure (example, UPS) .35% (Note: FedEx and DHL rates are higher). Cost to cover incoming shipments: $5,000,000 x .75 (margin adjustment) x .0035 = $13,125 Cost to cover outgoing shipments: $5,000,000 x .0035 = $17,500 Total cost to cover incoming and outgoing shipments: $30,625 High Tech Cargo Insurance Program (example) $5,000,000 *.20 = $10,000 Savings: $20,625 or 67% less Answer Using the example (3) above: The High Tech Cargo program will cost $10,000 if I have $5 million in sales. What have I spent in the last year for Cargo Insurance, for incoming and outgoing shipments, adjusting for what I insure and don't insure? What will I spend with my current program if I have $5,000,000 sales in the coming year, adjusting for what I insure and don't insure? If the answer is equal to or even a little less than $10,000, you should consider the High Tech Cargo Insurance Program. Why?
Answer Sure. This is the conventional appoach and is easy to do. We do find, however, that covering both incoming and outgoing shipments generates a more economical program overall, with less chance for mistakes in covering individual shipments. |