Shipping Insurance For Your eCommerce Store

A guide to shipping insurance for eCommerce. If you're looking to build brand loyalty and find out if shipping insurance is right for you, you're in the right place.

We all know that shipping is one of the most important parts of your eCommerce business strategy. It is your first direct contact with your customers, and it’s often their last impression of your brand. 

While your branding, shopping experience, and production value are essential parts of your business, your post-purchase experience is often overlooked. A good post-purchase experience will leave your customers coming back and trusting your brand.

Creating a memorable post-purchase experience involves more than just streamlined shipping methods, low rates, and a unique unboxing experience. A memorable post-purchase experience is one that establishes deeper loyalty between you and your customers, and that also involves having a plan in place for when things go wrong. 

That’s where shipping insurance comes in. Shipping insurance protects both you and your customers from any bumps in the road while their package is in transit. If the package is lost, stolen, or has damaged items, shipping insurance can smooth things over and ensure the customer is happy and you’re adequately protected. 

As you might expect, though, shipping insurance isn’t free. So we have to ask a vital question: is shipping insurance right for your business?


What is shipping insurance? 

Think of shipping insurance like any other kind of insurance you’re familiar with. It is a policy that covers packages that were lost, stolen, or damaged while in the hands of a carrier during transit. This coverage can be purchased on any individual package, be that for an expensive gift for a friend, jewelry, electronics, or other high-value items. 

Shipping insurance doesn’t have to only be for those sorts of high-ticket products, but that is certainly a good place to start. If your eCommerce store does specialize in these kinds of products, you will definitely want to consider adding shipping insurance to your shipping strategy. 

How much shipping insurance is going to cost your customer is going to depend on the value of your products. If you have higher value items, then they are going to cost more to insure during shipping. 

Shipping insurance isn’t limited to expensive items, though. You can offer shipping insurance to your eCommerce customers regardless of the price tag on your items.


How does it work?

If you’ve never even considered adding shipping insurance to your post-purchase strategy, or you’re a small business just getting on your feet, then the idea of this might be overwhelming. Rest assured, it’s easier than you think. 

There are two ways to provide shipping insurance to your customers.

  • Purchase from a carrier. This is a common way of protecting your customers’ shipments. USPS, UPS, and FedEx (the three main carriers in the United States) each have their own shipping insurance systems. 
  • Purchase from an independent provider. This option offers you much more flexibility, as independent providers differ in policies and you can find the best fit for your business. 

We’ll dive deeper into these options later in the post, but for now, we’ll cover the general process for all shipping insurance. 

If a package is lost, stolen, or damaged, the first thing to do is to file a claim. This is usually done through either the merchant or the customer submitting a simple form with information about their order and proof of the incident. That proof might include pictures of a damaged item or a screenshot of the customer’s order invoice. 


Purchasing shipping insurance from a carrier

The first option of providing shipping insurance is to purchase it through a carrier, such as USPS, UPS, or FedEx. If you’re already shipping with one of these, and the odds are very high that you are, then you’ll want to look into each of their respective shipping insurance policies. 

Purchasing shipping insurance from a carrier is a great option if you are a smaller business and just starting out. They are going to take care of most of the work for you and ensure your customers are satisfied. The reason smaller businesses benefit from this option is that you aren’t as concerned about bulk shipping, which leads us to the next option. 


Purchasing shipping insurance from an independent provider

If you are already an established shipper then you might be more interested in looking at independent shipping insurance providers. These companies are going to give you the option of getting a discount on bulk shipments and can often market shipping insurance as a product to your customers better. 

An independent provider can still be a great option if you’re just starting out. Finding the right company to offer you the right policy is the challenge, but once you do, you’re going to be in good shape. 

SmartShyp is an order management software that comes with a full suite of tools to make managing your orders and shipping processes simple, effective, and straightforward. To take the guesswork out of the eCommerce shipping process, consider using SmartShyp as your order management software.

On top of being an excellent order management software, SmartShyp is also equipped to handle your shipping insurance needs. Whether you want to purchase through a carrier or use our in-house package protection options, SmartShyp can make this an incredibly easy process


Closing thoughts

If you’re asking the question of whether or not shipping insurance is the right way to go for your company, you have to be clear on your intention. Are you looking to create a trustworthy brand with loyal customers? Then shipping insurance should definitely be on your radar.