Self Insurance Scheme
According to the UNHRD SOP, insurance is mandatory to all the Partners, however, partners are not obliged to proceed with insurance through the UNHRD.
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. 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. The insurance for goods in transit should not be thus part of the requests for 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 of white stock and CRS items 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 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 internal's, requests the regulatory framework for the insurance charge "Section 5 -Operational Risk Management" of WFP Transport Manual applies.
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 in case of damages/missing commodities. In these cases Paragraph 5.4 - Commodity Damages of WFP Transport Manual applies.
ODLR is payed directly by UNHRD against the average value of monthly stock reports.