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How to Choose the Right Shipping Insurance For Your Business

Sashank Ravindranath — Thu, 17 Oct 2024 05:34:42 +0000

Despite state-of-the-art tracking systems and parcel protection strategies, there’s always the possibility of your customers’ packages getting lost, damaged in transit or stolen.

This is where shipping insurance comes in — to protect your bottom line from unexpected losses. But with so many options out there, how do you choose the right insurance that suits your e-commerce business?

That’s where we come in — to guide you through the essential factors to consider when choosing a shipping insurance provider.

1. Understand Your Shipping Risks

Shipping insurance is never unnecessary. However, there may be cases where the cumulative cost of insurance might be higher than the occasional loss you experience as a business.

In such cases, before choosing a shipping insurance provider, you need to evaluate the specific risks your business faces. For instance, if you’re shipping electronics, luxury goods, or fragile items — you are at a higher risk for damage and loss and thereby need insurance more than ever.

Ask yourself the following questions:

What kind of items am I shipping (Fragile or high-value)?
How often do I experience lost or damaged shipments (Frequency of issues)?

Understanding these factors will help you choose an insurance provider that offers the right level of protection based on the risks you face.

2. Compare Shipping Insurance Options (Carrier-Provided vs Third-Party)

Many e-commerce businesses rely on carrier-provided insurance, which can be convenient but may not always offer the best value or coverage. To put it into comparison:

Carrier-Provided Insurance: Shipping carriers like UPS, FedEx, and USPS often offer insurance as part of their shipping services. While this is convenient, the coverage limits can be restrictive
Third-Party Shipping Insurance: A third-party insurance provider offers more flexibility and often provides broader coverage options than carrier-provided insurance. They may also be cost-effective for businesses with high shipment volumes.

3. Determine Coverage Options

Not all shipping insurance policies are equal. Different providers offer varying levels of coverage depending on the type of goods, shipment destinations, and the specific needs of your business.

Here are some factors to consider:

Comprehensive Coverage: Protects against a wide range of risks, including loss, damage, and theft.
Maximum Coverage Limit: Sufficient coverage for your most valuable items
Exclusions:Specific items or scenarios that the insurance won’t cover, such as high-risk international shipments, perishable goods, partial coverage (loss but not damage or certain shipping methods), etc
International Coverage: Ensure your provider covers international shipments if you sell globally.

Make sure you choose insurance that aligns with your shipping habits and the level of protection you require. If your products are high-value or shipped to locations with higher risk, you’ll want more comprehensive coverage. Choose an insurance provider that offers flexibility in coverage limits, allowing you to adjust based on the value of each shipment.

4. Consider Rule-Based Shipping Insurance

One of the latest innovations in shipping insurance is rule-based insurance, which allows e-commerce businesses to automatically apply insurance based on specific conditions.

For example, you can set pre-set rules to:

Automatically insure orders above a certain value.
Set insurance rules for fragile or high-risk items.
Customize policies based on customer location or shipping methods.

This flexibility not only saves time but ensures that you’re only paying for insurance when necessary, avoiding the cost of insuring low-risk shipments while fully protecting high-value orders.

5. Evaluate the claims process

A key aspect of shipping insurance is how easy and fast it is to file and resolve claims. When evaluating shipping insurance providers, pay close attention to:

Claims Filing Process: Is the process straightforward, or does it involve complicated paperwork?
Claims Resolution Time: How long does it take to process and approve claims?

Filing claims manually can be time-consuming and often results in delays in receiving reimbursement.

When choosing a shipping insurance provider, look for those that offer automated claims management. With LateShipment.com, all things insurance happen inside a unified portal, giving you access to a centralized view of submitting claims, tracking statuses, and everything else, thereby helping you save time and improve accountability.

Final Word

Choosing the right shipping insurance for your e-commerce business is an important decision that can save you time, money, and headaches in the long run.

By understanding your shipping risks, comparing options, automating insurance for high-value shipments, and evaluating the claims process, you can find the insurance solution that best fits your business needs.

Platforms like LateShipment.com make it even easier by integrating automated, rule-based shipping insurance into your workflow, giving you peace of mind with every shipment.

Investing in the right shipping insurance not only protects your business but also ensures a smoother experience for your customers, leading to higher satisfaction and loyalty.

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Yes, Shipping Insurance Is Worth It

Sashank Ravindranath — Thu, 15 Aug 2024 12:32:04 +0000

Shipping insurance costs a small percentage of your shipment value, but when things go wrong, they cover the entire value to compensate for the loss or damage of your packages.

But do I have to insure my packages? Is not insuring my packages worth it? Some questions are probably in your mind when you’re considering shipment protection. It is absolutely valid to have these questions. However, the potential savings far outweigh the cost. Consider this: without insurance, you’re taking a gamble with every package you send. If something goes wrong, you’re responsible for the entire loss. Shipping insurance transfers that risk to the insurer, providing you with peace of mind and financial protection.

Ultimately, the decision to purchase shipping insurance depends on you. However, in this article, we have highlighted the importance of insurance and when it is best to use shipping insurance.

Where to Get Your Packages Insured

There are two different types of shipping insurance:

Carrier Insurance; is offered by shipping carriers like FedEx, UPS, USPS, etc.
Third-party insurance; is offered by third-party insurance providers specializing in shipping coverage.

While most shipping carriers promote their shipping insurance service to you when shipping with them, carrier insurance may not always be preferable as they have limitations in terms of coverage and reimbursement.

With third-party shipping insurance, you can get more flexibility, as they often provide broader coverage options than carrier-provided insurance. They may also be cost-effective for businesses with frequent shipments.

The question now is: Do you need to use shipping insurance for every shipment?

Short answer: No (that really depends on your needs)

When Do You Need Shipping Insurance

Shipping insurance is a worthy investment based on the products, quantities, or conditions you’re shipping:

1. High-Value Items

When shipping goods such as electronics, jewellery, artwork, or any luxury items, it is worth investing in shipping insurance for these shipments. Due to their high financial value, any damage or loss of parcels will lead to a significant loss for your business.

2. Fragile Goods

Despite packaging and efficient handling, there is still a possibility of having fragile products broken during transit. If you’re a shipper of goods like glassware, ceramics, or instruments, you should be insured to cover the potential losses on that front.

3. Bulk Shipments

Shipping goods in bulk can be cost effective but the cumulative cost of the entire goods is substantial enough that it shouldn’t be left uninsured. When dealing with large amounts of parcels in transit, ensure they are insured.

4. Peak Shipping Seasons

During the holidays or special seasons, the volume of shipped goods increases dramatically due to heightened consumer purchases.

With numerous goods in transit during these seasons, shipments experience various challenges like carrier strains that lead to damage or loss. Using shipping insurance is necessary at this phase.

When Shipping Insurance May Not Be Necessary

If you ship low-value shipments, the cumulative cost of insurance might be higher than the occasional loss you experience as a business. In these cases, the financial loss from damage or loss of a parcel is something your business can manage without insurance, so investing in insurance may not be necessary.

But does this mean you have to stop making use of a shipping insurance provider? Absolutely not.

With a third-party shipping insurance provider like LateShipment.com, you can make insurance cost-effective by enabling customizable rules that allow selective insurance.

That is, insure just the shipments you want, be it high-value shipments, international deliveries, or any other high-risk orders.

Final Word

In conclusion, shipping insurance is a very reliable safety net that protects you from the financial burden of lost or damaged packages. While it might seem like an unnecessary expense, the peace of mind and potential savings on high-value shipments make it a worthwhile investment.

LateShipment.com simplifies the process of securing shipping insurance. With comprehensive coverage options that fit your specific needs and automated insurance, you can maximize cost savings on a large scale.

FAQs On Shipping Insurance

1. What is covered by shipping insurance?

Shipping insurance typically covers losses due to damage, loss, theft, etc. Specific coverage can vary by policy.

2. Is shipping insurance worth it?

The value of shipping insurance depends on the value of your shipment and your risk tolerance. Because, despite proper packaging techniques and precautionary measures, there are chances of packages getting lost or damaged while in transit. For high-value or fragile items, it’s often worth the investment.

3. Can I get shipping insurance from my shipping carrier?

Yes, many shipping carriers offer insurance options. However, it’s wise to compare prices and coverage with third-party providers, who might offer better coverage options and claim process, have better customer reviews, etc,.

4. How do I choose a shipping insurance provider?

Weigh the pros and cons of carrier insurance, third-party, and self-insurance, and understand what’s usually covered, and how you can get the best out of it. Here’s a guide that covers all the information you need to choose a shipping insurance provider.

This is a guest post by Jeremiah Obikoya

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Do You Ship Fragile Items Frequently? Here’s What You Need To Know

Sashank Ravindranath — Tue, 06 Aug 2024 14:51:34 +0000

Are you an e-commerce merchant that deals with fragile items such as glassware, ceramics, electronics, musical instruments, etc? Then you are in the company of businesses that are ever under threat of shipments getting damaged.

While damage is a constant worry for all e-commerce merchants, those who are frequently dealing with shipments that are fragile and tend to break easily must certainly make extra efforts to ensure that products reach customers safely without any damage.

Why Do You Need To Worry About Damaged Goods

Damaged goods are a serious issue that takes up one of the top 3 spots for delivery issues that tend to drive your customers away. Research shows that around 15% of all shipments are damaged in a year, with costs accounting for $1 billion.

These costs account for multiple areas such as the original product, shipping, and returns along with replacement and operational costs. It’s not just valuable money, each damaged shipment also comes with the risk of the customer experience taking a hit, further leading to frustration and ultimately customer churn.

These customers who defect from your business won’t stop at that and are prone to share their negative reviews that hurt your business’s reputation and demotivate other potential shoppers, ultimately hurting your profit margin.

Not to forget the existing troubles for all your teams in handling returns and replacements, issuing refunds, and managing customer complaints, all of which consume valuable time and resources.

The ‘damage’ from damaged goods is evident. So, what you need to do is safeguard your shipments during shipping to ensure that damages don’t happen and that the items safely make their way to the customer.

How To Ship Fragile Items?

Here’s a step by step guide for e-commerce merchants shipping fragile items:

1. Choose the Right Packaging Materials

The guide to prevent damage to your fragile items begins with packaging — at your warehouse. Think of packaging as the first line of defense. If this works out perfectly, then the chances of breakage are cut down to half or even much lower.

Sturdy, corrugated boxes should be your go-to. Remember, your box should be slightly larger than your product to accommodate ample cushioning
If your package’s contents are multiple items, use custom inserts for dividers or wrap each item individually — paying particular attention to corners and edges, so that they don’t stick out
For exceptionally fragile items like glassware, consider multiple layers of packaging
Secure the product firmly within the box without any movements within through bubble wrap, foam, air pillows, etc,
Reinforce the cushioning around the product by packing peanuts or crumpled paper to prevent movement within the box
Tape the box securely, ensuring the lid is firmly closed

2. Label your box clearly

Damages are mostly accidents, sometimes due to man-made incidents although unintentional. Workers at carrier sorting facilities deal with a huge volume of shipments on a day-to-day basis.

So, mishandling is a common occurrence that can be less of a concern for a retailer who sells teddy bears. But as someone shipping out fragile items, you can’t afford these chances. This is where you bring in clear and informative labeling.

Labels that say “Fragile” and “Handle with Care” labels are your product’s advocates. These labels let the handlers know of the contents and ensure your package(s) are treated with extra care.

3. Know your carriers

Major carriers such as FedEx, UPS, DHL, and USPS all have their list of suggestions and deadlines for retailers shipping fragile items.

FedEx – For fairly new merchants, FedEx provides the option to purchase standard and specialized boxes based on the item and charges an extra amount for packaging fragile items
UPS – Similar to FedEx, UPS also helps merchants with packaging fragile items such as lamps, furniture, pianos, artwork, mirrors,and vases
DHL – Apart from guidelines, DHL also offers shippers, options such as faster delivery options, special handling, and shipping insurance, all of which are charged an additional fee
USPS – Unlike other carriers, USPS has a particular service for shipping fragile items called Special Handling-Fragile that can be availed at $12.15 and works with multiple USPS services, including Priority Mail Express, Priority Mail, First-Class Package Service-Commercial, and more

Final word

As a frequent shipper of fragile items, following these steps might be extremely handy to minimize the chances of damage.

However, damage like all delivery issues is inevitable, even with the best of the packaging carriers. In such cases, proactive customer communication is your best option. Be empathetic about the incident and offer a solution to mitigate their frustration.

Even if damaged shipments cannot be avoided, you still have a shot at redemption. Shipping carriers offer the option for retailers to claim refunds for shipments that have been damaged in transit. Instead of filing these claims manually, you can make use of a parcel audit solution that automates the process.

Apart from taking the hassle, an automated solution also helps you keep track of reports that enable you to continuously monitor your damage rates and identify areas for improvement (changing carriers or service types).

If you’re a business that particularly deals with fragile items, then a recommended solution would be to consider third-party shipping insurance that offers peace of mind while shipping. Here’s a guide to shipping insurance where we have covered the basics, the different options, and how to get the most out of protecting your package.

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