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
