The Basics of Shipping Insurance
It’s common to insure your health and your car. One could argue it's wise to insure your smartphone. Some celebrities insure certain body parts because #priorities. Well, things are precious, so it only makes sense, right?
It’s no secret that when you ship anything, you take certain risks. You could keep yourself up at night, wondering:
- should I have sent out that fragile item to a customer uninsured?
- what are the odds of a courier losing my package?
- what if my package falls prey to that rogue wild boar who escaped the circus a few weeks ago?
If the idea of damaged orders, loss, or theft of your product at the hands of a courier makes you nervous, perhaps you should consider getting shipping insurance.
The Benefits of Shipping Insurance
Peace of mind
The day-to-day operations of your business keep you busy enough. If you could do without the the additional stress of guaranteeing the safety of every shipment you send out, knowing you have coverage through postal insurance or your express courier can help you worry less about your shipments.
Shake them burdens off.
If something happens to your parcel when it’s uninsured, the burden would be on you to cover all costs if the shipment is lost, damaged or stolen. If you take up parcel insurance, you can save yourself the headache by delegating the responsibility of protecting your shipment under the insurer.
It’s easy to get insured.
It’s quite convenient to add shipping insurance to your package – you can do so right at the time you are paying for shipping, and this nominal fee (for some, it's 3% of your declared value) is automatically added to your overall shipping price.
What You Need To Know About Shipping Insurance
Very few shipments are automatically covered.
Most worldwide express couriers cover domestic and international shipments with a value up to $100USD against damage or loss by default. USPS, on the other hand, only provides an automatic $100USD coverage if you are using their Express Mail service.
It’s worth noting that these are declared value coverages and NOT insurance. A declared value for a package is a carrier’s maximum liability in the event of package damage or loss. You would need to buy additional shipping insurance coverage if you want to protect your shipments above the declared value with various shipping couriers. This means that as a seller, you should declare if the value of your shipment is above $100USD.
See which couriers offer basic shipping insurance here.
Understand your terms & conditions.
Should you decide to move forward with shipping insurance, it’s best to familiarize yourself with the fine print. It’s possible for a claim to be denied because the courier does not cover a particular event.
For instance, UPS insurance, FedEx insurance, and USPS insurance do not provide coverage for precious stones, cash, or coins. Also, couriers may not provide coverage to certain destination countries.
Even with high value items, insurance coverage can be limited. For example, at the time of this post, FedEx limits the reimbursement value of plasma-screen televisions and artwork up to $1000USD only.
Another caveat that sellers should be aware of is how well they package their goods. Shipping couriers may not approve your claim if they conclude that your shipment was poorly packed. Check out our Help Center article for tips on how to package your parcel properly.
File your claims sooner rather than later.
Once you find out that your shipment is damaged, lost, or stolen, it is advisable to file the claim as soon as possible. Make sure you know your courier's cutoff time to file a claim. For USPS Insured Mail, the duration is 15-60 days; for UPS, it's five months if the shipment was within the US and up to 60 days for shipments outside the US, and FedEx requires you to file the claim if your packages are not delivered within 60 days from the purchase date.
Patience is a virtue.
While shipment insurance offers numerous benefits, do expect to wait when you file a claim as reimbursement can take a while.
The typical timeline for processing a claim includes searching for the lost package, which can take 7 to 10 business days. If the package is not located, then an authorization letter is sent, followed by supporting documents. Once the courier receives the documents, the whole process unfolds quickly; most cases get resolved within 3-5 business days.
Another option you can consider is a third-party insurance provider, as they offer shipping insurance at discounted rates and can process claims faster.
To sum up, if loss prevention is a concern for you, purchasing shipping insurance can help put your mind at ease. Getting insured is simple, as you can easily opt-in at check out for just a few extra dollars.
You can add insurance to your shipment on Easyship if needed. For instructions, head over our Help Center.
Previous Post:Avoid A Global Logistics Nightmare With These 4 Steps