Everything E-commerce Needs To Know About Shipping Insurance
International shipping insurance policies can protect both businesses and their customers against loss, theft, or damage. We’ve put together the ultimate guide of what ecommerce businesses need to know about shipping insurance.
If you’re an ecommerce business owner, you’ve probably come to realize that not every package makes it to its intended destination. There’s a lot that could go wrong during the shipping process, so much so, that 1 in 10 people worldwide have experienced their packages disappearing or worse — being stolen during transit. This resulted in an estimated US $38.8 billion loss of goods for businesses — and that’s not including the number of affected customers!
With an estimated 1.7 million packages going missing daily in the US alone and porch piracy also on the rise, e-commerce businesses ought to be prepared to take out shipping insurance policies that protect both their goods and their customers.
What is Shipping Insurance for E-commerce?
Shipping insurance for e-commerce is a type of insurance policy that protects goods against loss, theft, or damage during transit. Shipping insurance policies can be purchased to cover single items, a group of packages, or consolidated freight/bulk shipments.
In the past, shipping insurance for ecommerce might typically have just been bought for high-value items such as jewelry. However, as 4 in 10 customers say they would be highly unlikely to repurchase from a brand if they have a negative delivery experience, a flexible shipping insurance policy that covers all types of product categories is a much more sensible decision for e-commerce owners.
What’s Covered In International Shipping Insurance for E-commerce?
At this point, you’re probably wondering, “How much does shipping insurance for e-commerce cost?”, well, that depends on the scope and type of coverage you want to purchase.
The most basic shipping insurance policy is fairly straightforward and can be applied to most shipments. Basic shipping insurance policies usually cover packages against loss, theft, or damage during transit. Luckily for e-commerce, shipping insurance costs can be drastically reduced by bulk purchasing policies or using a third-party shipping insurance provider. Yet, for consumers, these policies can be expensive if choosing to protect a single shipment.
That said, there is another way.
Flosurance — Floship’s smart shipping insurance, can easily be enabled and automated by ecommerce brands to cover most of their shipments up to the value of US $10,000. Flosurance’s basic policy can be offered to e-commerces’ customers at a significantly lower cost than if the customers or ecommerce brand were to source shipping insurance on their own accord.
The second type of shipping insurance on the market features “secondary clauses” — aka additional premiums, that vary in cost depending on product type, shipping medium, and delivery destination. Flosurance is also configurable for shipments over US $10,000 in value though these will need to be manually enabled after a thorough discussion with your Floship Account Manager.
Are There Any Exclusions To Shipping Insurance?
Yes, generally speaking, there’s a multitude of prohibited and restricted items that are not covered under any kind of shipping insurance policy. Goods not covered by shipping insurance include:
- Hazardous Materials
- Precious Metals
- Securities & Debts
It’s advised to carefully read through the list of excluded items within the policy to ensure that your goods and customers will be protected.
Before Buying, Consider This
Before buying shipping insurance, there are a couple of things that any e-commerce must do to ensure that they are making a smart, informed decision to avoid any excessive costs.
Understand What Can & Cannot Be Insured
The first thing that will need to be done is to make sure that you have a comprehensive understanding of the items that will and will not be covered by your chosen policy. Most third-party shipping insurance covers most product categories yet it’s still advised to thoroughly check each policy’s list of exclusions. If the products you want to ship are not covered by the policy, that doesn’t necessarily mean that there isn’t an insurance policy out there. More than likely you’ll need to purchase a more specific kind of coverage which usually comes with a higher premium.
Read The Terms & Conditions
We know, we know, reading the full set of terms and conditions seems like a dull and exhausting process. However, by doing so, you’ll understand more than just what is excluded from the policy. A full, in-depth read of the t&cs will tell you everything that you need to know — from when the protection kicks in, to the kinds of protection that it offers as well as everything you’ll need to know in case you need to make a claim.
Know The Shipment Value
This one might not seem so obvious at first but it’s probably one of the most important steps you’ll need to take before purchasing shipping insurance. Falsely declaring the true value of the shipment could adversely impact the insurance policy. If you make a false declaration about the value of the shipment then it will affect your ability to make a claim and the amount of compensation (if any) that you receive. It could also mean that the shipping insurance policy that you purchase may also be voided — putting your goods and customers at risk.
How Do I Claim On My Shipping Insurance?
Look, these things happen. Parcels go missing, get damaged and unfortunately stolen all the time. The good news is, you’ve bought a shipping insurance policy and you need to make a claim. So, how do you do it?
Making an insurance claim can be quite a daunting process depending on the policy provider. Some insurance providers require time-specific documents, proof, pictures, and more before they can even begin to instigate a claim.
Thankfully, Floship has simplified the entire claims process for any claim made under Flosurance. Simply upload the required documents directly within the Floship platform and claim in minutes! You can keep track of any claim that’s been submitted and find out its current status — from pending to approved to reimbursed all within the system.
Automated Shipping Protection
These days, customers expect an enhanced delivery experience that will keep them coming back for more. With Floship, you can provide a seamless delivery experience that is entirely hands-off meaning you have time to focus on other more important tasks.
Simply enable Flosurance within the Floship portal and it’ll automatically insure your goods (up to US $10,000 in value) without you having to manually apply for a policy each time you receive an order.
For more information, speak to one of our shipping experts by clicking here.