Parcel shipping insurance can protect your profits and boost your brand by providing coverage for lost or damaged packages. Whether you’re shipping or receiving items, this lesser-known coverage can not only help replace lost or damaged packages, it can, in so doing, increase company trust, acquisitions, scale, and revenue.
A lost or damaged package can disrupt your business operations and result in impediments such as:
- Customer dissatisfaction
- Negative reviews
- Expensive replacement costs
While parcel insurance – also known as shipping insurance – can’t prevent your packages from getting lost, it can shield you from costly replacement expenses. Parcel insurance can also protect your financial interests by delivering savings of at least 50 percent over coverage from shipping carriers at the point of sale (POS).
While import volumes are below the record-setting levels that sparked the port congestion, shipping backups, and increased volume of wayward packages that characterized the headiest days of the pandemic, volumes of each are still higher than pre-pandemic levels. Higher volumes of such incidents can lead to more lost or damaged packages, making parcel insurance a key business investment.
Who is parcel insurance for?
A company that ships lower-priced items, such as t-shirts valued at $5, can be satisfied with the automatic coverage of up to $100 offered by UPS, FedEx, USPS and other carriers at the POS.
It’s companies that ship or receive a high volume of goods, typically at least 3-5 packages a day, at an individual value of $100 or more, that truly benefit from parcel insurance. Parcel insurance is simply more cost-effective for these high-volume shippers, and covers more than what is automatically available at the POS from a shipping company. In fact, parcel insurance can cost 50 percent less than coverage available at the POS.
Not everyone is aware that parcel insurance is available as an alternative to POS coverage. If your company ships a high volume of goods, obtaining parcel insurance can provide a competitive advantage because the cost for parcel insurance is based on the value of the items you ship, rather than the size or weight of each package. Neither are insurance costs based on a set monthly premium. You pay only for each box shipped.
What does parcel insurance cover?
Parcel insurance covers high-cost goods such as:
- Furs
- Artwork
- Jewelry
- Laptops
- Cell phones
Commodities not usually covered by parcel insurance include:
- Gift cards
- Lottery tickets
- Game tickets
- Loose diamonds or stones
- Personal or gift items shipped by employees
Parcel insurance also does not cover items delayed in transit.
How does parcel insurance work?
Parcel insurance coverage is right-sized. That means that your monthly coverage costs are based on the value of what you ship each month, as recorded on your manifest report.
Simply put, parcel insurance works by safeguarding against package loss or damage. It covers items shipped both from and to you. And because international buyers and sellers tend to lose parcels more frequently, parcel insurance coverage can be particularly valuable for companies that regularly ship globally.
Note that parcel insurance is not static: Any drastic changes regarding what, or how much, you typically ship must be reported to your insurance provider.
What are some common parcel insurance claims?
Packaging items conscientiously and tracking delivery progress can help avoid unwanted incidents, but mishaps can still occur even under the most providential of circumstances. Here are two common claims scenarios:
- The delivery disappeared. This involves a misdelivered package. The buyer didn’t receive the package, although the delivery scan says they did; it was delivered, just not to the right address. In this scenario, shipping insurance covers the cost of refunding the buyer who didn’t receive the item as expected.
- The delivery was damaged. Occasionally, a package will fall or be crushed, damaging its contents. Fragile items such as the glass on an electronics screen are particularly susceptible to such incidents. Shipping insurance offers protection when contents are damaged.
How long does it take to get started?
You can start using parcel insurance the same day you sign up for it. After you sync the free parcel insurance software with your own manifest shipping software, you’re fully and completely insured.
For more information about parcel shipping insurance, contact Parcel Insurance Plan.
