Shipping Insurance Guide: Coverage and Costs
Shipping insurance is an important topic for eCommerce businesses to understand. According to studies, around 1.7 million shipments are stolen or damaged daily. Without shipping insurance, the companies responsible for these packages would be unable to recover from such losses.
Coverage and costs can vary greatly, so it's important to know what options are available and how to best protect your products during transit. In this guide, we'll provide an overview of shipping insurance and outline the different types of coverage available
What Is Shipping Insurance?
Shipping insurance is an additional policy that senders can purchase to protect packages against loss or damage during shipping. Most carriers, like UPS, FedEx, and USPS, offer shipping insurance for an extra fee.
If a package is lost or damaged, shipping insurance reimburses the sender for the cost of the items and materials. Policies may also cover the shipping costs. Some providers even offer coverage for the value of items up to a specified limit.
Who Needs Shipping Insurance?
Shipping insurance can benefit any individual or business that frequently ships items, especially valuable or fragile goods. It is particularly important for:
eCommerce Companies
eCommerce retailers rely on successful delivery to operate. Shipping insurance protects against financial losses if orders are lost or damaged.
Manufacturers and Distributors
Companies that produce and distribute expensive inventory can insure their shipments to protect against damages during transit.
International Shipments
Long distance and international shipping carries more risk. Insurance provides coverage for packages crossing borders or traveling overseas.
Benefits of Shipping Insurance
Key advantages of purchasing shipping insurance include:
Financial Protection
Insurance covers replacements and repairs if items are lost or damaged.
Peace of Mind
Knowing shipments are insured eases worries about potential issues.
Customer Satisfaction
Insurance shows customers their orders will be protected if problems arise.
How to File an Insurance Claim
To submit a shipping insurance claim:
Gather Documentation
Have order details, receipts, invoices, and tracking info ready.
Contact the Insurer
Inform them of the loss or damage and follow their claims process.
Follow Up with the Carrier
Check if the shipping provider offers any additional compensation.
Recommended: How to Calculate the Estimated Shipping Cost
FAQs
What is shipping insurance and why is it important?
Shipping insurance protects the value of packages in case they are lost, damaged, or stolen during transit. It provides financial protection and peace of mind for both sellers and buyers.
How much does shipping insurance cost?
Shipping insurance rates vary by carrier, value of items, and destination. Expect to pay 1.5-4% of the shipment's value. Get quotes from multiple providers.
When should I buy shipping insurance?
If you regularly ship valuable, sensitive or important items, shipping insurance is highly recommended to protect against potential losses from damage.
What does shipping insurance cover?
Policies typically cover the item's value, shipping charges, and packing materials in case of loss/damage. Some also cover theft. Check policy details for exclusions.
How do I file an insurance claim?
Save all paperwork related to the shipment. Contact the insurer to start a claim. Provide necessary documentation and details on damage/loss. The insurer investigates and issues reimbursements.
How do I choose the right shipping insurance?
Consider coverage amount, provider reputation, goods type, transport mode, shipment value and origin/destination to select the ideal policy for your needs.
