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What Does Insured Shipping Mean? A Guide to Doing Business Properly

Diana Zheng
  •  
  •  
June 1, 2021

Businesses rely on couriers to get their products to customers. Most times, the delivery process is reliable, but sometimes packages get damaged or lost. Both the seller and the buyer should be prepared for that.

According to SaleCycle, 80.2% of online purchases are returned because of damage, and most customers returning products want expedited shipping or discounts. As a seller, you can solve this in two ways: insured shipping or paying out of pocket.

Of course, paying out of pocket will drain your income because most insurance companies charge per package. Thus, to avoid bad reviews, insured shipping is the way to go. 

What Does Insured Shipping Mean?

Insured shipping protects shippers from lost, stolen or damaged packages. If your products don’t reach their destination or arrive damaged, you will be entitled to a reimbursement for the declared value of the items. 

What does shipping insurance cover? As long as the shipping is insured, the package will be covered. However, most couriers require time to process these claims. Sellers then just send another item from their inventory and worry about the reimbursement later so that they don’t keep customers waiting. 

Should I Get Shipping Insurance?

Getting insurance for every package you send can eat up your time and budget. To promote efficiency, shipping companies should directly provide insured shipping to protect outgoing packages.

However, note that not every package can and should be insured. Here are the different situations when sellers can consider insured shipping. 

Valuable Items

The chances of a regular package getting lost or damaged are small, so getting insurance for them might not be economical. However, if you’re sending a valuable item and it gets damaged or lost, you cannot afford to shoulder the cost. As a rule, consider insuring anything that costs over $1,000. 

Fragile Items

It’s generally not a good idea to buy fragile items online. However, if you do sell them, you better insure your shipment so that you’re reimbursed if it gets damaged or lost. 

Even if you get insurance, protecting your package is still necessary. Your shipping partner should offer materials that can protect fragile items, such as bubble wrap, bubble mailers and packaging tape. 

If You Have a New Shipping Partner

Loyalty and familiarity are good for business. When you have a shipping partner, you know how they operate and how they handle your packages. In some cases, however, you might need to switch companies, and you’ll be unfamiliar with how they do things. Insuring your packages will protect you until you can be certain about the quality of their service. 

3rd-Party Shipping Insurance

Getting insurance from your logistics partner should be your primary option because they can offer favourable rates in addition to your shipping fee. However, if you must get it from a third-party shipping insurance provider, make sure their offer is affordable. Third-party insurance rates range from 1.05% to 3% of the package’s declared value. Any higher than that might be too expensive to maintain. 

When in Doubt, Ask for a Payout

You can never be too careful when shipping your customers' orders. Bad luck can strike at any time, and there is always the possibility of your product being mishandled, damaged or lost along the way. Even if these things are out of your control, you can still mitigate risks by getting your shipment insured. 

Let us help you protect your business, your customers, and yourself. If you're looking for a logistics partner that can offer you low-cost shipping with affordable, full-coverage insurance, contact us at Stallion Express.

Get started today! Ship faster, smarter, cheaper with Stallion.

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Written by Diana Zheng

Diana leads the growth marketing initiatives at Stallion Express. As a personal trainer turned digital marketer, Diana is obsessed with equipping eCommerce entrepreneurs with everything they need to scale their online businesses. You can catch her doing yoga or hitting the tennis courts in her spare time.

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