Ecommerce Fulfilment Services

Shipping Insurance: What is it & Do you need it?

shipping insurance
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If you run an eCommerce business and regularly ship products to customers, you’re likely familiar with the worry of whether your shipment will be in one piece once in the hands of the shipping carrier – or whether it will arrive at all! 

But did you know that 32% of customers have experienced a lost or stolen package in their lifetime? It’s a common challenge, especially for international shipping, but thankfully, there’s a straightforward solution: shipping insurance.

What is shipping insurance? 

Shipping insurance is a type of coverage that protects your goods in transit. It provides financial protection if your items are lost, damaged, or stolen while being shipped from you to your customer. This type of insurance is typically offered by shipping carriers or can be purchased separately from a third-party provider.

How does shipping insurance work?

When you purchase shipping insurance, you’re essentially paying a premium to the insurance provider in exchange for coverage in the event of a claim. The shipping insurance cost is usually based on the value of the shipped items, the shipping method, and the distance the items are travelling.

If something happens to your shipment during transit, you’ll need to start the claims process with the insurance provider. They will then investigate the incident and, if the claim is approved, provide you with a reimbursement for the value of the lost or damaged items up to the coverage limit.

What is covered by shipping insurance?

Shipping insurance can provide coverage for a variety of scenarios, including:

  • Lost or stolen packages: If your parcel goes missing or is stolen during transit, shipping insurance can reimburse you for the value of the lost items.
  • Damaged goods: If your products are damaged during the shipping process, shipping insurance can cover the cost of repairs or a refund for a replacement for your customer. 
  • Delayed deliveries: Some shipping insurance policies may also provide coverage for delayed deliveries, which can be especially important for time-sensitive shipments.

It’s important to note that the specific coverage provided by shipping insurance can vary, so it’s essential to review the policy and terms and conditions carefully before deciding who to go with. Here are the policies of our shipping couriers: 

Benefits of Shipping Insurance

Investing in shipping insurance can be very beneficial for your eCommerce business and your customers. 

Happier Customers 

By offering insurance cover, you can give your customers peace of mind and demonstrate your commitment to ensuring their orders arrive safely.

Financial Protection

Shipping insurance can help you manage the risks of transporting your products and recoup the cost of lost or damaged goods. This is especially important for high-value or fragile items, reducing the financial impact of unexpected incidents.

Peace of Mind 

With shipping insurance in place, you can have confidence that your shipments are protected, even in the face of unforeseen circumstances. This allows you to focus on growing your business without constantly worrying about the safety of your products.

Do I need shipping insurance?

The decision about whether to insure your shipments will depend on the value of your shipment. For smaller orders, like books or stationary, insurance may not be necessary. Many carriers will offer standard compensation once they take responsibility for these types of shipments, and the insurance may cost more than the retail value. 

If something goes wrong, and the value of the shipment is more than you would be willing to take as a loss, it is better to take out shipping insurance. This may differ from business to business, as a loss for a small pet supplies business would be different from a major fashion outlet, so this will change depending on the order value.

We would recommend taking out carrier insurance in the following circumstances: 

  • Shipping internationally 
  • High-value items 
  • Fragile products 
  • Luxury items that are at risk of theft
  • Large shipments like stock or wholesale
  • For shipments that pass through areas prone to issues like unexpected weather 

Need help with insurance cover? Speak to Delta Fulfilment 

Delta Fulfilment takes the stress out of shipping so you can focus on expanding your business. Whether you’re an eCommerce business targeting markets in the UK, EU, or USA, we can send your products out from our fulfilment centre. 

We’ll help you slash shipping costs, simplify insurance, and reduce delivery times. Partnering with all major carriers, our experts will guide you to the most economical shipping options. Let Delta Fulfilment streamline your logistics – contact us today to get started!

Shipping Insurance FAQs

Can you ship without insurance?

Yes, you can ship goods without purchasing insurance. Doing it this way means assuming all risks of loss or damage during transit, which could result in financial losses. 

What is proof of shipping insurance?

Proof of shipping insurance is typically a document or digital certificate provided by the insurance company or carrier. This proof confirms that your shipment is covered and details the terms and coverage limits.

Is shipping insurance worth it?

Shipping insurance is generally worth it for high-value, fragile, or large shipments. It provides financial protection and peace of mind to cover losses due to damage or disappearance.

Who pays for shipping insurance?

The shipper usually pays for shipping insurance, although the cost can be passed on to the buyer as part of the shipping fees. In some business models, buyers may pay extra for insurance at checkout.

What happens if my package gets lost or damaged?

If your insured package gets lost or damaged, you need to file a claim with the insurance provider or carrier. They will investigate the claim and, if approved, compensate you according to the policy terms.

What is the alternative to shipping insurance?

Alternatives to shipping insurance include using carriers with substantial loss and damage policies, self-insuring (setting aside money to cover potential losses), or using third-party insurance providers for higher-risk shipments.

What happens if my shipment is not insured?

You will likely take on the total financial loss if a shipment is not insured and gets lost, damaged, or stolen. The carrier typically has limited liability, often not enough to cover the full value of the shipment.

How much does shipping insurance cost? 

The cost of shipping insurance varies depending on the carrier, shipment value, and the risk involved. Generally, it’s a small percentage of the declared value of the goods, usually ranging from 0.5% to 2%.

What is covered in international shipping insurance? 

International shipping insurance for individual orders covers various issues when goods are transported across borders, such as loss, damage, and theft. Depending on the policy details, it may also cover specific scenarios like delivery delays and non-delivery.

If you are dealing with larger shipments like freight forwarding, you will need to purchase freight cargo insurance that will provide cover depending on the way it is shipped, either air, sea or land. 

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