What Is Shipping Insurance? A Definition And Whether It’s Worth ItFebruary 10, 2021
Try as most shipping carriers might, there is always a chance that packages might get lost or damaged during shipping. When mishaps occur, ecommerce businesses typically cover the cost of damaged or undelivered packages – but paying out of pocket is not the only option. Here we’ll explain what shipping insurance is and how it can help businesses cover the costs of any shipping errors.
What Is Shipping Insurance?
Shipping insurance is an optional service that helps shippers cover the cost of any damaged or lost packages. If an insured package does not reach its destination, or it is damaged in transit, then the insurance reimburses the shipper the value of the package.
Although this might sound like a great option, there is a cost to shipping insurance to consider before buying.
The Cost of Shipping Insurance
The cost of shipping insurance can change depending on the value of the shipped package. The more valuable it is, the more costly it is to insure the package. On the higher end, the average cost to insure a package worth $300 is $3.23 between the USPS, FedEx, and the UPS.
Now that we know the cost, is shipping insurance worth it?
The Value of Shipping Insurance
Like the cost of shipping insurance, whether it’s worth getting shipping insurance depends on the value of your products and your shipping volume. The likelihood of the average package becoming damaged or lost is relatively slim. If your products aren’t particularly valuable, shipping insurance may not be worth its cost. However, if you’re shipping a high volume of expensive products, purchasing shipping insurance might be beneficial.
The decision to purchase shipping insurance is personal and depends on the needs of your business. As with any business decision, it is important to weigh the pros and cons of purchasing this potentially valuable service.