What is Shipping Insurance and Does Your Business Really Need It?

As more individuals rely on the Internet for their shopping needs, companies are shipping more packages than ever before. Many of these businesses can attest that the more boxes they send, the higher the chance that parcels will go missing or arrive damaged. In these cases, companies pay to reship items, eating the cost of the additional inventory and shipping expenses. Over a year, these expenses can take a toll on business profits. One way to protect your financial well-being is through shipping insurance.

What is Shipping Insurance?

Similar to buying liability or property insurance, businesses can also choose to purchase shipping insurance to cover the risk of damaged or lost parcels. Shipping insurance reimburses the cost of a damaged shipment, including the cost to replace the items and to reship it to the final destination.

Do You Need Shipping Insurance?

Not every company needs to buy shipping insurance. It depends on what type of shipping services your company utilizes. More prominent companies, including FedEx and UPS, automatically insure packages up to $100. The United States Postal Service includes $100 in coverage on items being sent via their Express Carrier option.

If your shipments are valued at more than $100, the carrier will only cover that amount, leaving your company to pay the rest.

Tips for Choosing the Right Shipping Insurance

When it comes to buying insurance, you should understand what you are purchasing. Here are some ways to make sure you choose the right policy and company.

Read the exclusions.

There is plenty to read and understand in an insurance policy. Be sure to read the fine print on the policy, so you know what types of events are covered and which are excluded. For instance, shipping a package to certain territories overseas is often excluded because there is a greater risk in those areas of theft and damage.

Understand packaging requirements.

In addition to reviewing excluded events, policies also define what types of packaging requirements a company must use. Following both governmental and courier company requirements is vital. These can change on an annual basis, so it is important that your company stays up to date on the changes or outsource to a warehousing solution that specializes in shipping.

When Should You File a Claim?

To assure claims are covered and you are reimbursed promptly, claims should be filed as soon as the package is reported lost, damaged, or stolen. If there is damage, take pictures to submit to the carrier as well any required claim forms.

Econo-Courier is a courier service that also helps businesses with warehouse management. Contact us today to learn how we can help your business!