Whether you’re a business owner or an individual shipper, understanding the ‘why’ behind shipping insurance is essential for safeguarding your cargo and financial interests. In this blog post, we unravel the importance of shipping insurance and why it’s a non-negotiable asset in logistics.
Most carriers offer shipping insurance that protects you from financial loss if your product is damaged or lost during shipment. In this scenario, you will have to file an insurance claim depending on the value of your product that you declared beforehand. After you have submitted your insurance claim, the carrier will investigate your claim and accordingly reimburse you financially.
The insurance cost depends on the product you are shipping, its value, and where you are shipping it. Depending on your chosen carrier, you might have to prove that your product is damaged or lost during the shipment. Ensure that you read the terms and conditions of the insurance before committing yourself to take shipping insurance. Frequently, the carrier you choose to ship your equipment with offers you the option of shipping insurance. However, if you are shipping expensive or bulky items, the carrier may engage a third-party insurance service to cover the cost.
The cost of shipping insurance depends on who you choose as the carrier for your shipment. In general, UPS and FedEx have similar insurance charges. However, the charges differ widely if you have expensive or bulky items.
Shipping Insurance—How it Works
Think about the shipping insurance requirement when planning for product delivery. If you opt for shipping insurance, the total value of your product will be reimbursed to you if your product is lost, stolen, or damaged. Some companies, such as UPS and FedEx, include shipping insurance in their service but only up to a certain amount. This is known as the seller insurance. If you want higher coverage for your shipped goods, you will have to purchase it. This is known as buyer insurance, which you can opt for when sending the shipment.
If your product is lost, stolen, or damaged during the shipment, the next step is to file an insurance claim. The information required to file a claim depends on your chosen insurance provider. However, a few basic requirements are shipment details, all the relevant receipts, and documents that prove the accuracy of the price of the item. Ensure you file a claim within the timeline set.
Shipping Insurance—Why it is Required
Due to the recent pandemic, there has been a sharp increase in online sales, presenting a unique requirement to deliver goods quickly and seamlessly. In fact, statistics show that more than 159 billion packages were shipped worldwide in 2021. Not only that, but by the end of 2027, this number is predicted to increase to a whopping 256 billion. With this exponential increase in package delivery worldwide, it has become necessary to insure your shipments to ensure that you don’t suffer excessive financial loss if your products are stolen, lost, or damaged.
The various advantages of opting for shipping insurance are the following:
- To secure and protect
- Convenient
- Better customer satisfaction and loyalty
- Improved company reputation
- Convenience in international shipping
Let’s look at these advantages individually.
• To Secure and Protect
One of the main reasons for opting for shipping insurance is getting security when delivering the goods. During a product shipment, goods have to go through various levels of scrutiny before they finally reach the customer. The product can be lost, damaged, or stolen during this shipment, which is common. In this scenario, if the carrier refuses to take responsibility for the shipment loss, it could have negative financial implications for the business and the customer. If you opt for shipping insurance, then in these cases, all you have to do is simply file a claim, and you will be reimbursed financially. Thus, shipping insurance provides you both security and protection.
• Convenient
Shipping insurance is convenient for business owners. The tracking details are sent to them and their insurance provider when they ship their product. So, at every point of the shipment, the business owner and the provider know the status of the shipment. If the shipment is lost, damaged, or stolen, they are aware of it. In some scenarios, along with the tracking information, the business owner and the insurance provider can opt to be alerted if any problem arises with the shipment. If the issue is known beforehand, that makes the claims process a little more seamless.
• Better Customer Satisfaction and Loyalty
When you opt for shipping insurance, you can ensure that the shipping company delivers the product on time. When you deliver your product on time every time, you guarantee many happy customers. On-time delivery is a good way to get long-term customer satisfaction and loyalty. For the customers, you prove to be a genuine and sincere business. Since the retailers have the tracking information of their products handy, they can keep their customers appraised of any changes to the delivery time. Customers always love open and honest communication. The shipment process becomes hassle-free and seamless for the seller, enabling them to drive customer satisfaction.
• Improved Company Reputation
If a retailer can ensure timely delivery, that automatically improves customer satisfaction. For any size of company, reputation plays a pivotal role in ensuring new and repeat business. If there are misses, customers do not waste time going online and leave complaints on the company’s websites and social media pages. Needless to say, these reviews can damage a company’s reputation irrevocably. A strong shipping insurance can guarantee that the claims are handled seamlessly and quickly. This quick and easy claims settlement process goes a long way to protect the company’s reputation.
• Convenience in International Shipping
Thanks to the recent pandemic, there has been a surge in online business. Inevitably, many companies realize the potential and take their brands on a global platform. That means these retailers have to ship their products globally. The chances of errors during delivery are higher in international shipments than in domestic ones. The increased chances of shipment errors are because these products pass through various customs offices and post offices. Solid shipping insurance will cover this eventuality; consequently, your business and the customer will be protected against potential losses. It is specifically correct for shipments on an international scale.
Conclusion:
There are considerable benefits of opting for shipping insurance. Apart from those listed above, other benefits worth mentioning are considerably less paperwork through automated software that makes the shipment process seamless. The insurance providers use Artificial Intelligence (AI) in the form of dashboards and trackers and can keep an eye on all shipments. If you select the right provider for shipping insurance, your claims process will be short and hassle-free. You get peace of mind, are protected against disasters, and your general shipment process is much smoother. Go ahead and start researching for that ideal insurance provider who will give you the perfect shipping insurance.
About XPDEL:
XPDEL helps eCommerce brands accelerate their growth, empowering them with multichannel fulfillment, whether shipping directly to consumers, delivering to businesses, or selling through retail stores. We are founded and operated by veterans with experience from Amazon, FedEx, UPS, JDA, Walmart, Target, and other leading companies in eCommerce and Retail. Guided by these experts, we provide customer experiences that help you grow your business.
