Everything Ecommerce Businesses Need 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, resulting in an estimated USD $38.8 billion loss of goods for businesses — and that’s not to mention an irate horde of disgruntled customers.
With an estimated 1.7 million packages going missing on a daily basis in the US alone, and porch piracy also on the rise, it’s crucial that ecommerce companies are prepared to take out shipping insurance policies that protect their goods and customers.
What is Ecommerce Shipping Insurance?
Ecommerce shipping insurance is a type of 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 might typically have just been bought for high-value items such as jewelry however, considering that 4 in 10 customers would be unlikely to repurchase from a brand should they have a negative delivery experience, purchasing a flexible shipping insurance policy that covers all types of product categories is a much more sensible decision.
What’s Covered In International Shipping Insurance?
At this point, you’re probably wondering, “how much does shipping insurance cost?”, well, that depends on the scope and type of coverage you want to purchase.
The most basic type of shipping insurance policy is fairly straightforward and can be applied to most shipments. Basic policies usually cover packages against loss, theft, or damage during transit. Luckily for ecommerce businesses, shipping insurance costs can be drastically reduced by purchasing policies in bulk 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 — tiksuper’s smart shipping insurance, can easily be enabled and automated by ecommerce brands to cover most of their shipments up to the value of USD $10K. Flosurance’s basic policy can be offered to ecommerces’ 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 feature “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 USD $10K in value though these will need to be manually enabled after a thorough discussion with your tiksuper 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. Some prohibited items include:
- Currencies
- Hazardous Materials
- Gemstones
- 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 international shipping insurance, there are a couple of things that any purchaser will want to do to ensure that they are making a smart, informed decision to avoid any excessive shipping insurance costs.
- Understand What Can & Cannot Be InsuredThe 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 & ConditionsWe 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 ValueThis 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 purchased a shipping insurance policy and now you need to make a claim. So, what do you do?
Submitting a claim can be quite an arduous process depending on the policy provider. Some providers require time-specific documents, proof, pictures, and more before they can even begin to instigate a claim.
Thankfully, tiksuper has simplified the entire claims process for any claim made under Flosurance. Simply upload the required documents directly within the tiksuper platform and make a 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.