The Basics of Shipping Insurance

While most shipments arrive safely, the financial fallout from the few that don’t can be significant. Lost, damaged, or misdelivered parcels lead to product replacement, reshipping costs, and reputational harm — especially as consumers increasingly buy high-value goods online.

According to Forbes, shipping and logistics errors cost eCommerce retailers an estimated 11% of annual revenue through lost goods, refunds, and operational overhead. A single mishandled order can erase the profit from dozens of successful ones.

These days more consumers are comfortable buying high-value products through eCommerce which makes a potential loss an unpleasant experience and can damage the reputation of your business.

If the idea of damaged orders or loss of your product at the hands of a courier makes you nervous, perhaps you should consider getting shipping insurance.

What is Shipping Insurance?

Shipping insurance is a policy a shipper can purchase to get reimbursed for shipments that are lost or damaged in transit with a courier. It can be bought through couriers or third party vendors at the time of shipment, with costs varying depending on the declared value of the goods.

What You Need To Know About Shipping Insurance

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 will need to buy additional shipping insurance coverage if you want to protect your shipments above the declared value with various shipping couriers. As a seller, you should declare, if the value of your shipment is above $100USD.

Easyship’s shipping insurance is the easiest and fastest way to secure and process claims when something goes wrong. With coverage of up to $10,000 and a super fast turnaround time, Easyship’s shipping insurance is a great option.

The Difference Between Buyer and a Seller Purchasing Shipping Insurance

In general, the seller buys shipping insurance since they are responsible for the product up to the point of delivery. They risk the monetary losses so have more incentive for a layer of security shipping insurance provides. However, there are times when a buyer will purchase shipping insurance as well; for example, if they are in a location where delivered packages are less secure.

Understand  Terms & Conditions

Should you decide to move forward with shipping insurance, it’s best to familiarize yourself with the fine print. A claim can 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 correctly.

File Claims Sooner Rather Than Later

Once you find out that your shipment is damaged or lost, 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.

3 Key Benefits of a Shipping Insurance

1. Peace of Mind

The day-to-day operations of your business keep you busy enough. If you could do without 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.

2. Remove the Burden of Replacement Costs

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.

3. 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 Are the Risks of Shipping Without a Shipping Insurance?

The main risk of going without shipping insurance is going to be the cost of sending a replacement product to the customer. While this not might harm the bottom line on lower-value goods, it can add up if you ship in high volumes or your products are of high value. You will have to calculate shipping errors into your loss prevention strategy.

Should I Get Shipping Insurance?

Each eCommerce business is different, so there’s no one size fits all answer. In general, sellers that buy shipping insurance tend to ship in high volumes or have high-value products, such as jewelry, art, apparel or electronics. In these cases, the cost of replacing missing or damaged products can add up and eat into profits. Purchasing shipping insurance provides of peace of mind and allows for more predictable loss prevention costs.

International shipping creates risks as well due to the wide variety of couriers and geographies covered. There will be locations where delivering packages is less reliable and there’s a higher chance that a package will get lost or damaged.

How Easyship Can Help

Sellers should seriously consider third party shipping insurance options because couriers don’t offer the best or more affordable options, and claims can take longer to settle. That’s where Easyship can help. We offer shipping insurance coverage of up to $10,000 for any shipment.

Easyship customers can also seamlessly take advantage of Insurance Settings in their dashboard to ensure all shipments have coverage. Our Custom Values setting allows sellers unparalleled flexibility in choosing how to calculate shipping insurance. Additionally, Easyship also boasts the fastest insurance claims processing, approving claims in 39.93hrs on average (less than 2 days).

Easyship users now have three ways of calculating their insurance.

1. You can choose to insure for just the item's selling price (this is great for high-value shipments).
2. For less valuable shipments, you can choose to insure this for a set percentage of the selling price.
3. Finally, you can set your price as the insurance value.

Utilizing the feature can help sellers reduce their shipping insurance costs while providing the flexibility to adjust the coverage based on the value of their products.

You can add insurance to your shipment on Easyship if needed. For instructions, head over our Help Center or visit our Insurance page.

Shipping Insurance FAQ

Does Easyship offer insurance on packages?

Yes, Easyship offers Added Shipping Insurance for items up to $5,000 USD.

How is shipping insurance calculated?

Easyship users have three ways of calculating insurance: You can choose to insure for just the item's selling price (this is great for high-value shipments), you can choose to insure your item for a set percentage, or set your price as the insurance value.

Are there items that can’t be insured?

Yes. Most couriers and insurance providers do not cover restricted items such as cash, coins, precious stones, hazardous materials, or live animals. Always review the provider’s excluded items list before shipping.

Is shipping insurance worth it for low-value items?

Not always. For low-cost or low-margin items, the cost of insurance may outweigh the benefit. But for high-value or fragile items, insurance can prevent major losses and preserve customer trust.

Who files the claim — the buyer or the seller?

Usually, the seller (shipper) files the claim since they are legally responsible until the package is delivered. Some buyers may purchase insurance themselves if they live in areas with higher theft risk.

How long does it take to get reimbursed?

With Easyship, most claims are processed in under 2 business days (avg. 39.93 hours) once the required documents are submitted. Courier-provided insurance can take 7–30 days depending on the carrier.

Can I add insurance after the package has shipped?

No. Insurance must be added at the time of shipment creation. Once a package has been accepted by the courier, you cannot retroactively insure it.

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