“Precaution is better than cure,” isn’t that one of the most overused phrases? But we have cliches for a reason. Even with the best efforts, things can go wrong, especially in e-commerce. And rather than being sorry later, it is better to be safe first. And this is where shipping insurance in eCommerce comes in.
When it comes to shipping insurance, you probably have too many questions and too many doubts. Insurance in itself is an investment, and you cannot be too careful where you put your money.
We will help you understand all the factors and dispel any myths surrounding shipping insurance in eCommerce.
Without much preamble, let’s get some facts straight.
What is Shipping Insurance in Ecommerce And Do I Really Need It?
Shipping Insurance in eCommerce
In simple words, it is insurance, similar to any other insurance policy, where you get monetary compensation if packages get stolen, lost, or damaged while in transit.
Whether your packages are shipped individually, in larger quantities, or as a whole cargo or freight, you can choose to protect them.
Is it really necessary to have shipping insurance?
Yes, the chances of parcels getting stolen or lost are pretty less if you choose the right shipping courier service, but still, the risk remains. Unpredictable situations and unannounced curveballs may still hit you.
You won’t incur many losses if the products in transit are of less value. But, what if a customer has purchased a delicate but expensive item, and it got damaged.
For such situation, what are your options? Either a refund or a replacement is given to the customer. In any case, you must pay the cost out of your own pocket. And if you are unable to do so in a timely manner, you risk tainting your reputation as well as losing the customer’s trust.
However, having shipping insurance in eCommerce will aid you in recovering the loss and ensuring that you replace the products and deliver them on time.
What are the Benefits of Shipping Insurance in Ecommerce?
Safety blanket
Having insurance can mean the difference between going bankrupt and having an opportunity to recover. You may face a significant monetary loss as a result of serious damage to your cargo due to unforeseen circumstances, which could result in a financial crisis.
While shipping insurance may not cover the entire loss, it can at least help you get things rolling and start over.
Peace of mind
Once you have your goods insured, you don’t have to constantly fret about them getting damaged, lost, or stolen.
This sense of security brings peace of mind, which is essential when you have hundreds of problems running through your head.
Thanks to the shipping insurance in eCommerce, you have one less thing to worry about.
Customer Satisfaction
In any eCommerce business, customer satisfaction should always come first. A poor delivery experience may cause customers to become frustrated, and you may lose business as a result.
All of this could be avoided if the product was replaced or reimbursed in the event of damage or other issues. And you can do so immediately if you have shipping insurance in eCommerce.
General Average Cost
This one can be a big hurdle. So, if the shipping carrier is damaged, there is a basic tenet that every supplier must pay a certain amount or their products will not be handed.
This type of cost is referred to as general average costs because the losses are shared by all those who are affected. However, if your insurance covers it, you won’t have to pay anything because the insurer will be responsible.
What Kinds of Risks Can Shipping Insurance Cover?
Here’s something to consider: different types of shipping insurance are available to cover various risks. Before you begin insuring anything, it’s always a good idea to first assess your needs and research the types of risks that are covered before making a decision.
Risk of rejection
If your cargo does not meet customs’ requirements, it could be rejected during international shipping. You could lose a lot of money in such a situation. As a result, you can purchase a rejection policy to cover the loss in full or in part in advance of such incidents.
Risk of physical damage
Physical damage to products can occur as a result of poor loading/unloading operations, or as a consequence of other factors such as cargo being hit by a natural disaster or a road accident while in transit. You can cover the cost of these unforeseen circumstances with the physical damage insurance.
Risk of exhibition
You may need to send your products all over the world for exhibitions and promotional events. This allows potential customers to see the product up close and personal.
It does, however, expose it to a set of threats, some of which may or may not result in damage. You can purchase shipping insurance for eCommerce to prepare for such scenarios.
Damage to stocks
If your goods are damaged while being stored in a warehouse or while being moved to it, you can get stock damage insurance to cover those losses.
What Kinds of Shipping Insurances are there?
Typically, there are four shipping insurance.
- Third-party insurance
- Self-insurance
- Carrier insurance
- Declared value coverage
Now, before you buy insurance from any company, you have to be careful about certain things.
Factors to Consider Before You Choose a Company For Shipping Insurance in eCommerce
- In the matter of filing claims, you will notice that every company has its own list of norms. Before you initiate, make sure you know everything there is to know about the rules.
- It’s usually a good idea to become familiarised with the terms and conditions of the company you’ll be working with. If your claim does not fall under some specific circumstances, it is possible that it will be denied.
- Keep in mind the timeframes for filing claims; they can take a long time to process. To be safe, do it right away in the event of damage or loss.
Summing Up
Shipping insurance in ecommerce is, no doubt, important. But knowing when, where, and how much to insure is equally so.
At Parceldeck we ensure to deliver your package swiftly but safely. In addition, if you want to know more about shipping, read: How Can You Make Shipping for eCommerce Sites Easier?
