What is shipping insurance?
And why does your business need it?
Consumers and businesses are no strangers to lost, damaged or porch pirated packages. And with the continued growth of the ecommerce space, there are increased risks to packages in transit. What can your business do to mitigate these risks? What is shipping insurance and what are the benefits? You’ll find all the answers you need in this blog.
What is shipping insurance?
Shipping insurance can be purchased by your business and can provide coverage for packages that are lost, damaged or porch pirated while in transit. Shipping insurance can cover loss or damage up to the insured value of the goods, plus shipping costs. Your policy can be tailored to your business’s needs based on the goods you ship, how you ship and the carriers you use, as well as include coverage for high-value, fragile, time-sensitive or perishable goods. Your business can even let your customers decide which purchases to cover.
What is the alternative to shipping insurance?
Many businesses rely solely on declared value/carrier liability to protect their goods. Unfortunately, what many businesses may not understand is that declared value/carrier liability is not real insurance.
Carrier liability is the standard liability offered by the carrier for a shipment, in the event of loss or damage (e.g. up to $100 for small package, or $25/lb. for LTL). Excess liability is excess-value coverage (e.g., more than the carrier’s standard liability), up to the cost of the shipment. Carrier liability is based on small-print terms and a web of governing statutes, some of which date back to the 1930’s. The statutes allow carriers to limit their exposure and exempt a variety of situations from their liability.
When it comes to carrier liability, the burden falls on the shipper to prove that the loss or damage occurred while the goods were in the physical control of the carrier. Carrier liability does not cover concealed damage. Additionally, the claims process can be lengthy and burdensome.
Below are key points that differentiate carrier liability, excess liability and InsureShield® shipping insurance offered through UPS Capital Insurance Agency, Inc.
5 Benefits of shipping insurance
With shipping insurance you won’t have to wonder if your packages are covered and for how much. You can have confidence that your shipments are protected, and the flexibility to indicate the value you want to cover. Additionally, you can select coverage rules based on SKU, order value or location. Even if you are shipping high-value, fragile, time-sensitive or perishable goods, you can rest easy knowing your packages are covered.
Full reimbursement and expedited reshipment
51% of small and medium sized businesses (SMBs) said a top challenge for them is financial loss due to shipping replacement merchandise. Customers expect if there is an issue that companies will fix it and fix it quickly. 38% of consumers are likely to fault the company they purchased from for any shipping issues. The good news is that with shipping insurance you can quickly reship replacement goods or refund or provide a credit to your customer with more confidence that the associated costs can be offset with less risk to your bottom line.
Quick and easy claims
The claims experience can be a major pain point for businesses when it comes to the shipping experience, with 65% of SMBs stating that a lengthy claims process is a top frustration. With InsureShield® shipping insurance you can easily file a claim online and, if approved, have the claim paid in days not weeks1.
Peace of mind
With shipping insurance, not only can your business experience an easy claims process, but you can also ship confidently knowing your items are covered up to the full retail value. Over 70% of SMBs believe that insurance can enable them to provide better customer support. Retain loyal customers by providing an excellent shipping experience. You can get the best of both worlds: peace of mind for your business and peace of mind for your customers.
Bottom line protection and reputation protection
37% of consumers are unlikely to buy from an SMB again if they experience issues in the shipping experience, resulting in $56 billion of potential lost sales annually. But, businesses can recapture $35 billion in potential lost sales by improving the shipping experience for consumers. With shipping insurance, your business can protect its bottom line and its reputation.
Insuring better shipping experiencesTM
Level up your supply chain and provide a best-in-class customer experience with InsureShield® shipping insurance through UPS Capital Insurance Agency, Inc.. Get started today.
1| Figures are based on aggregate insurance claim payment data collected by UPS Capital Insurance Agency, Inc. during the period of four consecutive fiscal quarters ended December 31, 2021. Individual results may vary.