A customer just bought a product from your store. You collect their mailing address, set up your branded packaging, and ship their ordered item.
But have you thought about what happens if your product gets broken or lost during the delivery process?
No one knows what can happen to your product during its transportation to the customer. It’s why your business needs a game-plan to prepare itself in case things go wrong.
What is Shipping Insurance?
When people hear the word “insurance”, they typically think of insurance for their health or home. But little do people know that it’s also possible to get insurance on products you ship to customers.
Shipping insurance covers the delivery fees and costs of your item in case something goes wrong during transportation. Let’s dive into the reasons why investing in shipping insurance is a smart move for your business.
Why You Should Consider Shipping Insurance
It’s impossible to predict the future, even if you think that you have everything under control. Your product could get lost or broken during delivery, which could lead to a disappointed customer. Some of the benefits of getting shipping insurance include:
Peace of Mind
Without insurance, you’ll be in charge of covering shipping costs and refunds if your item doesn’t arrive at the customer's doorstep. It’s a process that adds extra stress to your workload, and you probably already have a busy schedule.
Getting shipping insurance takes stress off your back. No matter what happens to your package, you get peace of mind knowing that your item is always covered.
It Protects You From Any Financial Loss
Your item is in good hands when you get shipping insurance. The process might require a bit of paperwork, but the insurer will handle everything to make sure you get your money.
It’s also possible to get insurance for high-value items. Some carriers provide coverage for items up to $50,000, which we’ll go into later.
Getting Shipping Insurance Is Fast and Easy
Getting shipping insurance doesn’t have to be a complicated process. There are plenty of options at your disposal to get your items insured quickly. It’s even faster when you integrate a tool like Essential Hub, which makes it simple to incorporate insurance.
The Different Types of Shipping Insurance Available
Here are the two main types of shipping insurance that you can choose:
Carrier Insurance
Different companies such as UPS, USPS, and FedEx all offer insurance for items you ship. Price varies from carrier to carrier, and each has limits on the maximum value of products that are covered.
Third-Party Software
You can also get insurance by integrating shipping software into your store. A shipping platform can ensure you get insurance on each item and offers the best shipping rates to customers.
How Much Does Shipping Insurance Cost?
If you decide to get your shipping insurance from a carrier, here’s how much you can expect to pay:
Things To Take into Consideration Before Getting Insurance
International Restrictions
Keep in mind that international restrictions influence whether your item qualifies for coverage or not. There are certain countries that carriers do not allow insurance to. For example, if your item gets lost in Paraguay, you won’t be able to obtain shipping insurance since it goes against US trade rules.
Certain countries also block you from importing certain goods. You cannot get coverage on items prohibited to ship in the country you are targeting.
Terms and Conditions of the Insurance Contract
You must also be careful of the terms and conditions that come with shipping insurance. Some items don't qualify for coverage, even if you ship them domestically.
Maximum Item Value
Carriers also offer limits to shipping insurance based on the value of the item. Let’s take a look at them below:
How to File an Insurance Claim
Next, you may wonder what steps to take to file an insurance claim on a lost or damaged product. Some carriers require you to file a claim within 60 days, while others give you up to nine months to do it.
Here’s what you’ll need to do to get insurance for your product.
Your Package Got Lost During Delivery
If a customer reports that they’ve never received your item and can’t track it online, you’ll need proof of loss. Here are the documents that you’ll have to prepare in advance:
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- Evidence of pickup from your warehouse
- Sender and recipient address
- Tracking information
- Package information: size, type of product, and more
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Your Package Got Damaged
How you respond when your package gets damaged depends on your carrier. You’ll likely have to take pictures of the damaged packaging to compare it with the package's photos in its normal condition.
It will also be required to provide documentation such as the original invoice, recipient address, declared value, and more. The carrier might inspect the package as well.
Your Package Got Stolen
Getting one of your items stolen is a tricky situation to be in. If you’re tracking an order, but it never seems to arrive to the customer, here’s the documentation you need to prepare:
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- Order tracking number
- Description of what’s in the package
- Recipient and sender mailing address
- Proof of damage and value
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Resources to Help You Out
If you need more information on how to file your insurance claim, check out these main couriers' resources:
Is Shipping Insurance Right for you?
Running a business can be stressful enough. If you’re looking for extra peace of mind, getting shipping insurance goes a long way. No matter what happens to your item during delivery, you can rest assured that you’ll be covered if things go unexpectedly.
Essential Hub makes it easy to add insurance on every item that you ship. Contact us today to learn more!