Insurance first came about as a way to protect valuable shipments sent by merchants and noble people in the Middle Ages.
Fast forward many centuries, and the same type of insurance is still available, in the form of shipping insurance.
As a business, one of your many considerations will be deciding whether you should ship your products with shipping insurance. Read on to find out more.
What does shipping insurance mean?
Let’s start with the basics: what is shipping insurance?
Shipping insurance is a policy you can purchase that will reimburse you for any items that are lost, stolen or damaged while being transported by your chosen courier. It can be bought through the couriers themselves or third party insurance providers.
In general, businesses take out shipping insurance as opposed to the buyer, since you are responsible for the items up until delivery and risk the monetary losses, giving you more reason to invest in the protection and security that shipping insurance offers.
What does shipping insurance cover?
There are so many shipping insurance policies out there, which provide coverage for all manner of items and shipments. A few shipping insurance policy types include:
- All-risk - covers all goods from potential catastrophes.
- Named perils - covers specific possessions within a shipment.
- Total loss only - a policy that only covers when an entire vessel and cargo is lost.
- Warehouse-to-warehouse coverage - an all-encompassing policy that takes effect from pick-up at destination warehouse right through to drop-off point.
There are also options that cover multiple shipments over a specific time. This is known as ‘open coverage’ and might be a better option than numerous ‘single coverage’ plans if you ship large volumes of items.
How much does shipping insurance cost?
Shipping insurance costs will vary greatly depending on the declared value of the goods, how comprehensive your chosen policy is, and whether you take the courier’s insurance or a third party insurance policy. Do your research to find the most competitive rates for your business needs.
Is shipping insurance necessary?
Which brings us to this final question: do you really need shipping insurance?
The fact is, pretty much all major courier companies already provide insurance up to the declared value of parcels. And many businesses function perfectly well by sticking with this level of insurance coverage.
However, a decent minority of businesses take out insurance that isn’t the courier’s policy to cover all types of cargo shipped to every spot on the globe. This may be because of an increase in the frequency and value of their shipments, more competitive rates, limitations with the generic courier company insurance policies (e.g. some will only cover values up to, say, $1,000).
When calculating if insurance is cost-effective for your business, it helps to estimate the value of your products and the volume of shipping. It is also helpful to calculate how many of your products get lost and damaged to see if the extra costs for insurance outweigh the damages.
If your items are especially fragile and valuable, and therefore at a higher risk of damage or theft, then third party insurance may well be worth it to give you, and your customers, that extra security.
If you’re an eCommerce retailer and are experiencing issues getting your products to your customers in good condition and on time, investing in quality shipping insurance may help you gain high ratings and a more trustworthy reputation with customers.
Another way to help ensure your shipments reach their destination in perfect condition is through effective eCommerce packaging and shipping solutions. Here at Signet, we help over 60,000 Aussie cutomers with everything they need to wrap, pack and ship their goods, such as shipping boxes and bags, product protection essentials, and much more.
If you’d like to speak with a Signet staff member about our packaging options, contact our Sales Team on 13 7446, email sales@signet.net.au, or Live Chat with us by visiting www.signet.net.au.
