Self Insurance Scheme
To improve UNHRD processes efficiency and risk management, the Self Insurance Scheme has been agreed as the modality an insurance policy to be applied to UNHRD Partner’s stocks. This covers insurance from the point when the goods are received in the UNHRD hubs, up to the delivery point in the country of response. According to the UNHRD SOP, insurance is mandatory to all the Partners, however, Partners are not obliged to proceed with insurance through the UNHRD. Therefore, all cargo that passes through the UNHRD warehouse is covered by the WFP corporate insurance, from the moment of its receipt to the UNHRD warehouse until its delivery to the final destination. This applies also to items that transit to HRD warehouses for short lapse of time.
When Partners don't require to proceed with insurance through the UNHRD, the insurance of goods during transportation should be thus part of the requests for transport quotations launched by the UNHRD hubs and in case when there are long terms agreements for transportation in place, the transporter should be informed accordingly that the insurance part of their rate would not be paid by the UNHRD.
UNHRD recovers from partners cost of insurance for the cargo stored in UNHRD hubs as insurance of stock is a specific service provided to our partners at cost. Most of the UNHRD Partners are in agreement to cover the cost of insurance. The insurance scheme is not compulsory to the partners, and they can opt not to include it as special service. The items belonging to Partners that refuse to cover the insurance rates will remain uninsured.
The following rates are charged to the Partners to recover the cost of insurance:
- 0.6% of the value of the cargo (MAP on day that PI is raised) to be dispatched for the internal Partners (WFP)
- 0.35% of the value of the cargo (MAP on day that PI is raised) to be dispatched for the external Partners
Cost of the insurance must be included on all PIs issued for transport of the cargo when the UNHRD arranges for transportation, even in case of trans-shipment, and on all PIs for handling cargo out of the warehouse in case the partner organizes their own transportation. This regulation embraces also sale with replenishment from Suppliers stock balances and CRS items lent to the partners, not only the cargo belonging to the organizations. In case of loans, the partner borrowing the items pays for the insurance of the cargo. The quotation of the SIs provided in the PI is revised at Debit Note stage to adapt it to MAP value of goods at dispatching stage. i. e. Final Packing List total value.
NOTE All items that falls under Global Commodity Management Facility (GCMF) inventories -food commodities- stored in UNHRD warehouse are not subject to UNHRD Self Insurance Scheme, as they are covered by corporate WFP insurance scheme from receipt of commodities by WFP up to the Delivery Point (where Delivery point means the recipient country), as mentioned in Chapter 5.1.2 - Insurance Activities : Commodities of Transport Manual.
The insurance provided by the UNHRD covers cargo stored in our hubs from the moment of receipt of goods into the depots to their delivery to the final destinations (the rate charged is not affected by the duration of storage nor by the distance to the final destination and is always percentage of the cargo’s value). This means that the insurance for goods in transit should not be requested for in the RfQs launched for transportation and the insurance part of rates should be removed from the LTAs for transportation already in place (and the transporters should be informed about this arrangement accordingly).
If a Partner, especially internals, requests the regulatory framework for the insurance charge, "Section 5 - Operational Risk Management" of WFP Transport Manual applies. In particular ODLR maintains a cargo policy that provides an All Risk Cover for all such bilateral and other third party shipments including those managed under the Service Provision and UNHRD service categories as detailed in Chapter 5.2.4 - Bilateral and Other Third Party Shipments of WFP Transport Manual.
Detailed explanation of what the insurance coverage includes can be found in Paragraph “5.2.3 - Terms of Insurance Cover” of WFP Transport Manual.
In case of claim, WFP-ODLR should be informed immediately regarding damages/missing commodities. In these cases Paragraph 5.4 - Commodity Damages of WFP Transport Manual applies. ODLR provides with a insurance reimbursement upon receipt of the documentation required to verify the loss or damage occurred on the commodities.
Insurance service is paid to ODLR directly by UNHRD on the base of the average value of Partners monthly stock reports.
With regards to cargo will low rotation index, in line with Chapter 5.1 "Type of Stocks" of UNHRD Standard Operating Procedures, Partners will be requested to take back any stock for which no movement has been recorded after 24 months. Alternatively, UNHRD can arrange for prolonged storage as a Specific Service at cost.