What Is Shipping Insurance? Do you need it?

Because eCommerce is all about purchasing products online, shipping is an essential part of reaching customers anywhere in the world. If you don’t invest in your shipping and delivery strategies, you won’t be able to send products to your buyers, whether within Australia or abroad. This will eventually lead to negative customer feedback, low satisfaction rate, and difficulty building a loyal customer base. All this is the last thing every business owner would want to happen, and that is what makes well-thought-out shipping and delivery a vital aspect when it comes to running an eCommerce business.

There is not much of a guarantee that every package sent here and overseas will arrive safely at its destination. Although the right packaging method provides an extra layer of protection against damage to parcels, things can get out of control in the entire shipping process. So, what will happen when an item is damaged or goes missing during shipping? That is when shipping insurance comes in.

You will learn more about shipping insurance in this article. It will also cover why you need shipping insurance, how it works, the types of shipping insurance you can avail yourself of, and the benefits of getting your parcels insured. Continue reading below as we take a closer look at each of them.

What Is Shipping Insurance?

Shipping something valuable may cause hesitations and what-ifs, and there is no surprise if you want your parcel to arrive safe and on time. For an eCommerce business owner, successful shipping of products draws the line between a good and great financial year. Moreover, the increasing trend of online shopping and consumerism only shows that practising the best shipping protocols is crucial more than ever.

You don’t know what domestic and international shipping have in store for your parcels. After all, we don’t get to see how carriers handle our items as soon as they leave our facilities. Considering shipping insurance is a smart idea with so many things that can go wrong in the shipping process. It might seem complex or even overwhelming at times, but shipping insurance can be one of the best decisions you make for your business once you get the hang of it.

In simple words, shipping insurance is a service that aims to protect the shipper in case their packages are either damaged, lost, or stolen while undergoing shipping procedures. For example, an insured parcel does not arrive at its destination or came but is damaged when delivered. The shipper will get a reimbursement based on how much is the declared value of the item(s) in the package.

Do You Really Need Shipping Insurance?

It is recommended that you get shipping insurance even if you are a casual shipper. In case something goes wrong, it relives you thinking that the value of your products will be reimbursed to you. Other than that, the right shipping insurance will give you peace of mind and reduces the risks involved during the shipment of your products to its receiver’s doorstep.

Whenever a package has been lost, damaged, or stolen, you have to file a claim. You might also have to provide documentation that supports your claim of your item’s worth or value to be reimbursed. Sometimes, carriers follow a process that determined whether your package is stolen or lost. This could take up more days, extending the reimbursement process. If not, it only takes a couple of days.

Types of Shipping Insurance

Before availing of shipping insurance, take note that there are different types you can choose from. Although this gives many options, it is easy to pick the one that does not align with your deliverables. That said, only select shipping when you already have identified your insurance requirements. It is encouraged to prioritise your needs in times you are still on the edge of picking which one among the three types. Other than that, each type of insurance offers different benefits and potential downsides. Weigh your options first and understand your needs to fully utilise insurance benefits to their fullest.

1. Carrier Insurance

Courier companies usually provide parcel insurance, whether as part of the delivery quote or as an additional service. Carrier insurance protects shippers against loss or damage to their goods by providing a particular value of money depending on the shipped goods. It only covers incidents where goods were damaged because of the carrier’s mistake or negligence. They will be held accountable when bad things happen to the parcels being shipped.

2. Third-Party Insurance

You can get parcel insurance online or request a quote to customise your policy. The other option you have is to purchase this insurance from an agent of a carrier company. They may also cater to clients in their respective local offices, where personnel takes care of in-person appointments. If your courier partner does not offer shipping insurance, you can get it directly from a third party. There is no difference in the policies they offer because both guarantee protection to your package in case of damage or loss.

3. Self-Insurance

How does this type of insurance work? While the other two types of insurance are effective ways of protecting packages, shippers with self-insurance take responsibility if anything unexpected happens to the goods being shipped. They will also cover the replacement of costs to buyers in case of loss or damage to their products. Self-insurance may provide more extensive protection for lower service rates.

Get Reliable Courier Services from Couriers by Demand Express

Taking the extra miles to get your package insured has many benefits—it saves you time and money, secured your products, and gives you peace of mind. The next time you ship within Australia or overseas, ensure that you have your goods secured with parcel insurance. You can get parcel insurance from various providers. But make sure that you know what you need so that you can utilise insurance benefits to the fullest. Check out Couriers by Demand Express‘ website to learn more about shipping procedures here and abroad. You can call us on 02 9095 5000.

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