Shippers can purchase shipping insurance to protect themselves against loss, theft, or damage to shipments during transit. The majority of shipments arrive intact and on time at their destinations, but shipping goods still poses a number of risks.
The situation nowadays results in higher demand for buying products online, which raises the risk of loss and damage of the products through shipment. In this case, you will lose your reputation. The cost of shipping insurance will vary depending on the declared value of the goods, and it can be acquired from couriers or third-party vendors at the shipment time.
The risk of packages being damaged or lost is always present, so insurance is often recommended. These advantages are worth considering:
- Without insurance, if something happens to your parcel, you will be responsible for covering the cost of loss, damage, or theft. The advantage of parcel insurance is that the insurer is in charge of protecting your shipment, so you will not need to worry about it.
- You get security this way, and if things go wrong, you can offer quick service.
- As a business owner, you’re busy enough with the day-to-day operations. Whether you use postal insurance or your express courier, knowing that your shipments are covered can take some of the stress out of shipping.
- You can get shipping insurance right when you are paying for shipping, and you will automatically be charged a nominal fee (sometimes 3% of the value you declare) once the package has been shipped. So it’s quite easy.
- Throughout the holidays, it is a wise choice to insure your packages even if you don’t want additional coverage. During that time, carriers can process a higher number of packages than usual, which increases the chance of losing or damaging packages.
What does the it cover?
International and domestic express couriers provide protection against damage or loss for shipments valued up to $100USD by default. Clearly, the insured value coverages are not insurance but declared values. When a carrier declares a value for a package, it undertakes the most comprehensive liability for package damage or loss.
For shipments that exceed the declared value, you must purchase additional shipping insurance coverage. If your shipment is valued at over $100USD, you must declare it.
Shipping insurance vs. declared value
Basically, the declared value is the price a shipper declares for an item before shipping it. When freight charges are calculated, the declared value is one of the options.
This is a way for carriers to limit their liability for delays and losses. Accordingly, the declared value indicates how much the shipment costs the business and is generally less than its declared value. As long as you declare the value of the package, your package will be covered for shipping.
You should purchase shipping insurance if you frequently ship parcels, if they have high value, or if you ship internationally. Make sure you get enough shipping insurance for items such as jewelry, paintings, collectible coins, valuable musical instruments, medical supplies, or pharmaceuticals, among others.
In spite of the fact that declared value is not insurance, it does increase the carrier’s financial liability. Declared values could be of different types depending on which shipping company you choose.
Who should purchase it?
Generally, the seller owns the insurance on the shipping since the product is under their responsibility up to delivery. Shipping insurance provides them with an additional layer of security since they are at risk for monetary losses. In some cases, the buyer may also purchase it, for example, if they are located in a less secure place.