Shipping Insurance for E-commerce Stores

Shipping is one of the essential aspects of every e-commerce business. It could either break or make the business. Shipping is vital because e-commerce is all about ordering and delivering goods to customers. If shipping isn’t done correctly, customers will not be satisfied, which can affect your business.

However, hiccups can happen anytime, especially if you run a dropshipping business. In that case, there is an alternative. Shipping insurance will save you from shipping errors and associated damage. Read on for a detailed insight into shipping insurance.

What is Shipping Insurance, and How Does it Work?

Shipping insurance protects you from stolen, damaged, or lost packages. For example, if you send an insured package to your customer and it gets damaged or doesn’t get delivered, The insurance company will refund you the exact value of the package.

Obtaining shipping insurance for your e-commerce business is an excellent way of minimizing loss in case something goes wrong. Before you get paid for any shipping loss, you must file a complaint with your insurance company. You may have to submit documents showing the actual value or worth of the product.

Every e-commerce business needs shopping insurance for several reasons. It helps you minimize risk and ensures your customers are satisfied. Some of its benefits for your online store include:

• It saves money.
• It gives peace of mind.
• Security is guaranteed.
• It is easy to get.
• It reduces risk.

What Are the Types of Shipping Insurance?

There are three types of shipping insurance. They all have their specific purpose. They include:

• Carrier Insurance: Your insurance company provides this kind of insurance. It can be paid as an extra or part of the delivery fee.
• Third-Party Insurance: The shipper is financially responsible for the package and pays for any refund or replacement. With third-party insurance, the time it takes to process claims is shorter. However, out-of-pocket costs could mount up quickly.
• Self-Insurance: It applies to goods delivered by courier companies and provides lower price protection.

What Are The Factors To Consider Before Buying Shipping Insurance?

There are various factors to consider before purchasing shipping insurance. Some of them include:

Terms and Conditions

It is essential to go through the terms and conditions of the insurance company you wish to use. There are situations where the insurance company won’t take responsibility. So check if you’re comfortable with all their rules. For example, USPS and FedEx insurance do not cover deliveries to some countries.

Destination

The destination is also another factor that should be considered. Some places are at a higher risk of damage or theft than others. So it is better to insure goods going to such areas.

Claim Process

Every insurance company has its own policy. You need to understand the process of how they file claims, such as the timing, how to prove the worth of a particular shipment, and requirements for proving damage.

Items to be Insured

Most insurance companies do not cover all kinds of items. Some items are prone to be stolen or damaged at a particular location.

Remember that most insurers will provide default coverage as well. You must be aware of the defaults for primary carriers and be able to weigh the value of a shipment against all of the associated risks. Doing this allows you to decide whether additional insurance is required for complete coverage.

Time Frame for Filing of Claims

You must make claims as soon as possible after discovering that your shipment is missing or damaged. When filling in for a claim, make sure you understand the cut-offs. Reimbursement might take a while; it takes about 6–10 days to look for a package.

You must send an authorization letter and other supporting documents to support your claim if the package can’t be located. Then the whole process becomes more manageable. It can take 3-5 working days to resolve at this level.

Final Thoughts

You are taking a risk whenever you ship goods to customers. You’re either up all night worrying if the goods have gotten to the customer or if the package has gone missing. Insuring all your shipping will save you from stress and mitigate risks. Even if shipping goes wrong, insurance will cover all the losses.

Get shipping insurance for your e-commerce business to minimize risks and protect your bottom line. Shoplazza has collaborated with top insurance companies to give you the best.

(Contributed by Ayotomiwa Omotosho & Hermes Fang)