Shipping insurance becomes fundamental to provide satisfactory compensation and customer service whenever there's a parcel that gets lost or arrives in poor condition to your foreign customers. With Outvio's shipping software for eCommerce, you can easily manage and send insured shipments, ensuring peace of mind for both you and your customers. Learn all you need to know about shipping insurance and solve all the problems regarding international shipping and shipping issues.
What is shipping insurance?
Shipping insurance is your backup plan when things go wrong during delivery. It protects your packages against theft, damage, or loss, ensuring you don’t shoulder the financial burden if something happens. If a shipment is lost or arrives damaged, the insurance company or courier steps in to cover the costs.
For online businesses, shipping comes with risks at every stage of the process. A solid insurance policy gives peace of mind to both sellers and buyers, knowing there’s a safety net if complications arise.
Every courier has its own rules about what’s covered, but investing in additional shipping insurance is often worth it. It ensures fair compensation and smooth customer service when something goes wrong, especially for international shipments.
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What does insured shipping cover?
Coverage depends on the courier or insurance provider, but it typically includes events beyond your control, like delays, theft, loss, or damage. International shipping, in particular, can be tricky. Customs checks, long transit times, and multiple handling agents increase the risk of mishaps.
Even domestic shipments aren’t guaranteed to arrive perfectly. If your courier doesn’t offer enough protection or your products need extra care, adding shipping insurance is a smart move to avoid costly problems.
Who is responsible for shipping insurance?
The responsibility for shipping insurance typically depends on the agreement between the buyer and seller. In most cases:
- Seller's Responsibility: If the seller offers shipping insurance, they are responsible for purchasing it and handling claims in case of loss or damage. This is common in e-commerce transactions where sellers want to ensure customer satisfaction.
- Buyer's Responsibility: If shipping insurance is optional and the buyer declines it, the buyer may bear the risk of loss or damage. Conversely, if the buyer opts to purchase insurance, they are responsible for ensuring proper coverage.
- Carrier's Role: While carriers like UPS, FedEx, and USPS provide shipping insurance, they are not automatically responsible for insuring shipments unless explicitly purchased.
Why use shipping insurance?
Shipping insurance isn’t just an extra—it’s your safety net in the unpredictable world of deliveries. Whether you’re sending a package across town or across the globe, insuring your shipments ensures they’re covered against damage, loss, or theft. Here’s why it matters
Benefits of insured shipping
1. Save money on losses
Packages can get lost or damaged—it happens more often than you’d think. In the U.S., one out of every 180 packages was stolen last year, costing consumers an average of $112 per incident. Shipping insurance reimburses you for these losses, so you’re not left footing the bill.
2. Build trust with your customers
When you offer insured shipping, you’re telling your customers: "We’ve got you covered." People are more likely to buy again from businesses that protect their orders. It’s a simple way to show you care and keep them coming back.
3. Make problem-solving easy
If something goes wrong, insurance makes it easier to file a claim and get your money back. No long back-and-forths—just quick resolutions that save you and your customers time and stress.
4. Look professional
Offering insured shipping doesn’t just protect you; it positions your business as trustworthy and reliable. Customers notice the difference when businesses go the extra mile to ensure their peace of mind.
5. Protect Expensive Shipments
Selling high-value items like electronics or jewelry? Don’t take chances. Insured shipping safeguards these items, ensuring you’re not out hundreds—or thousands—if something goes wrong.
How much does shipping insurance cost?
The cost of shipping insurance varies depending on the declared value of the package, the carrier company, and the destination. Here's a simple explanation of what to expect in terms of costs and why it is important for both individuals and eCommerce businesses.
For individuals
- Average Cost: Between $1 and $5 per $100 of the declared value. Some companies include basic coverage (usually between $50 and $100) at no additional cost.
- When is it worth insuring? When sending high-value items like electronics, jewelry, or packages with sentimental value.
- Practical Example: If you're sending a $300 gift via FedEx, you might pay an additional $3 to $6 for extra insurance.
- Useful Sources: Look into insurance options from FedEx and USPS to ensure you get the best conditions.
For eCommerce businesses
- Average Cost: Generally 1% to 2% of the product's value. Additionally, many carriers offer volume discounts to businesses.
- Why is it essential? It helps protect you against losses or damages during shipping, improves customer satisfaction, and reduces the risk of returns or chargebacks.
- Practical Example: Insuring a $1,000 order with DHL could cost you between $10 and $20 but avoids larger losses in case of incidents.
- Advanced Options: Consider external insurers like ShipStation Insurance or Shipsurance, which often have more competitive rates for large or frequent shipments.
Couriers that offer shipping insurance in the UK
Royal Mail
Royal Mail offers compensation for domestic and international shipments that have suffered a delay or damage, or that have been lost. You can check out the conditions on their website.
Parcelforce Worldwide
Parcelforce also provides compensation for domestic and international shipments. You can check out the conditions of every shipping method on Parcelforce’s website.
DPD
DPD has also taken into account all the chances of something going wrong during the shipping process of a parcel, domestically or internationally, and offers standard and special shipping insurance. You can calculate the cost of additional insurance on their website.
Hermes
Evri, the new name of Hermes in the UK, also covers a wide range of possibilities that are listed on the website, including items without coverage and maximum coverage. Other valuable information about their services can also be found.
UPS
UPS is an international shipping company that provides shipping insurance only for some packages, shipping options and locations. For more information, read all the details available on UPS’s website.
FedEx
FedEx offers different shipping insurance in the various territories where it operates. To check liability in Europe, go to their section on conditios of carriage.
TNT
TNT is an international shipping company that offers additional shipping insurance options. You can check availability on their website.
DHL
DHL is another popular courier in Europe that offers extended coverage depending on the value of the products or the type of shipment. Check out their conditions and costs to decide if this is the right option for your shipments.
Insured shipment by carrier: comparative table
| Carrier | Shipping Service | Included Insurance Coverage | Additional Insurance Options | Estimated Price for Additional Insurance | Claims Policy |
|---|---|---|---|---|---|
| FedEx | Express, Ground, International | Basic coverage up to $100 USD included. | Additional insurance available, based on declared value. | $1 USD per $100 additional (minimum $3 USD). | Claims within 21 days. |
| UPS | Ground, Express, Worldwide Express | Basic coverage up to $100 USD included. | Additional insurance based on declared value. | $1.05 USD per $100 additional. | Claims within 9 months. |
| DHL | Express Worldwide, Economy Select | Basic coverage up to $100 USD or €100 included. | Additional insurance available for 1% of declared value (€10 minimum). | 1% of declared value (€10 minimum). | Claims within 30 days. |
| USPS | Priority Mail, Priority Mail Express, First-Class Mail | Includes up to $50 or $100 USD depending on the service. | Additional insurance options up to $5,000 USD. | From $2.10 per $100 additional. | Claims within 60 days. |
| Royal Mail | International Tracked, Signed, Standard | Basic coverage up to £20 or £50 depending on the service. | Additional insurance available up to £250 or more, depending on the service. | From £2.50 for higher coverage. | Claims within 80 days. |
How to get shipping insurance as an online store
Automate the process of shipping domestically and internationally with Outvio. This platform for eCommerce focuses on everything post-checkout and speeds up your logistics process, eliminating steps where human errors might occur, like the picking and packing of products or the creation of shipping labels and customs documents.
Sign up and connect your local and international couriers with your online store through Outvio’s interface and use our pre-set rates, or include your own shipping rates and conditions. You’ll be ready to go in just a few minutes!
Once you have your first order ready to be sent, insure the shipment and print the label, you are all set for success!
Shipping insurance can make a lot of sense for many eCommerce stores, specially for all those businesses dedicated to online sales of products with great monetary value.
Now that you know what is shipping insurance, what it usually covers, the advantages of offering it and which couriers offer this service in the U.K., you'll be able to take your customer service to the next level!
