In the dynamic world of e-commerce, where shipments travel across continents to reach their recipients, unforeseen circumstances can arise at any time and expose packages to various risks. This poses a threat to business. That is why goods delivery insurance is playing an increasingly important role in modern online commerce.

The importance of taking out insurance in e-commerce

Financial protection in case of lost, stolen or damaged parcels.

For example, more than 1.7 million packages worth $25 million are lost every year in the United States. This can lead to significant financial losses for a business, especially when it comes to expensive goods. However, having insurance allows you to compensate for possible losses. This provides the business with protection from financial costs associated with unsuccessful shipments.

Sales promotion

Trust plays a significant role in the consumer decision-making process. When you let your customers know that their packages are insured, you increase their confidence in their purchase and the peace of mind that their order is protected, which is very important to them. This can encourage potential customers to make their first purchase. In the event of problems with an order, having insurance protects customers, so it is important to provide a quality experience in difficult situations.

Protecting your brand reputation

In addition to the financial benefits, shipping insurance also helps build trust between sellers and buyers in e-commerce. Knowing that their purchases are covered in case of unexpected circumstances makes them more likely to choose your business again and again, and recommend it to others.

International shipments

Shipments sent over long distances and subject to various types of transportation have a higher risk of loss or damage. These situations may arise due to various factors: due to customs procedures and the work of international postal services. With cargo delivery insurance, you can protect against losses and damages that can occur even during international shipping.

Insurance coverage cases:

A loss. In the event that a package is lost during transit, shipping insurance will cover the declared value of the lost items.

Damage during transportation. Shipping insurance also provides compensation for items that are damaged during transit due to weather, mishandling, or other causes beyond the sender’s control.

Theft. If the package is stolen during delivery, insurance will help compensate for the losses.

While shipping insurance offers a variety of protections, it’s important to understand the limitations so you can manage expectations and prepare wisely. Below are some major exceptions.

Incorrect packaging: If an item is damaged due to improper packaging, it is often not covered by shipping insurance. It is extremely important for e-commerce businesses to ensure that their products are properly packaged according to the carrier’s guidelines.

Product Type: Perishable items that deteriorate/deform in transit or fragile items prone to breakage may not be covered if the damage is caused by their properties.

Valuables: coins, bars, diamonds and other precious stones, jewelry (costume jewelry), stone slabs, stocks, bonds, currency – are not subject to insurance.

Delivery insurance from carriers

When purchasing shipping insurance from carriers, costs are assessed individually for each package. Most standard shipping services include a minimum amount of insurance in the shipping cost (usually $100 for many: USPS, FedEx and UPS). If the value of your package exceeds this limit, you may purchase additional insurance separately for eligible items. If there are problems with the transportation of your package, you will be able to request a refund of the covered amount from your carrier.

When considering shipping insurance from a carrier, consider the following guidelines:

Individual delivery providers may limit the total coverage that can be purchased. For example, items shipped via USPS Priority Mail can only be valued up to $5,000, while FedEx and UPS offer services with limits up to $50,000.

If you’re selling high-value items that exceed your insurance limits, you may need to use specialized delivery services or consider third-party shipping insurance. There are also advanced delivery options, such as signature confirmation, which may be relevant when sending expensive goods.

Each carrier has its own conditions for compensation. Before using the services of a transport company, carefully study the insurance rules. Find out which risks are covered and which are not, what exclusions exist and when you need to apply for compensation.

Investing in shipping insurance is not only a security measure, but also a cost-effective strategy for businesses. Without insurance, companies would have to bear the full cost of lost, damaged or stolen goods. The importance of shipping insurance coverage cannot be overstated given the unpredictable nature of shipping.