Shipping insurance protects your business and customers from financial harm if a package is lost, stolen, or damaged. Because of this, adding insurance to your ecommerce store might seem like a no-brainer! However, insuring packages isn’t as simple as signing up for a policy—you need to answer some key questions first.
Should you include seller-purchased or buyer-purchased insurance on your website? And if you offer buyer-purchased insurance, how can you convey the value to your customers? This article will explore what shipping protection is and when it’s worth it for merchants and shoppers.
What Is Shipping Protection?
Shipping protection, also known as package protection, is a shipping insurance service that ecommerce stores offer to customers to safeguard the value of shipments against loss, theft, or damage. Shipping protection provides financial security and peace of mind for both businesses and consumers. By offering shipping protection, you can enhance customer satisfaction, reduce the burden of handling claims and replacements, and maintain a positive reputation even when delivery issues arise.
Learn more about how shipping insurance works.
What Does Shipping Insurance Cover?
Shipping insurance typically covers the value of goods that are lost, stolen, or damaged during transit, but coverage differs by provider and plan. You should always check your plan details to learn what items or scenarios are exempt from coverage.
Carrier-provided shipping insurance includes coverage for damage and loss incurred while the package is in the carrier’s custody. If a shipment is improperly packaged, or if it gets stolen from a doorstep after delivery is completed, the carrier will not reimburse you.
Third-party insurance providers, on the other hand, usually offer more comprehensive and customizable coverage options, including protection from issues that arise after delivery completion. If you’ve been seeing high rates of porch piracy (post-delivery package theft), consider adding shipping insurance to your ecommerce store.
How Much Does Shipping Insurance Cost?
Shipping insurance costs vary based on the provider.
Carrier-Provided Insurance
USPS, UPS, and FedEx provide free coverage for most packages worth up to $100. To declare a higher value—and get more coverage—you’ll need to pay an additional fee. For a full list of declared values and corresponding carrier fees, see our article on shipping insurance costs.
Third-Party Insurance
Third-party shipping insurance is usually cheaper than carrier liability coverage, with prices ranging from 1% to 3% of a product’s declared value.
While 1% to 3% is a relatively small price to pay for greater consumer trust, it can add up over time. Fortunately, there’s a low-cost option for merchants who don’t want to offer built-in shipping insurance for all orders.
If you add shipping protection to your ecommerce store using an app like Norton Shopping Guarantee, your business will be able to offer insurance at no cost to you. Any shopper who chooses to add insurance to their purchase will simply pay a small fee. If something goes wrong with their order, they can easily get in touch with the Norton Shopping Guarantee team to file a claim and receive reimbursement.
Norton Shopping Guarantee with Package Protection by EasyPost is available for Shopify and WooCommerce stores.
As a Shopper, Is Package Protection Worth It?
Let’s say you decide to add buyer-purchased shipping protection to your store. If your customers have never purchased shipping insurance before, they’ll probably have questions. What does shipping protection do? Should I add it to my order?
Don’t assume the offering will speak for itself! Make sure to clearly convey the benefits of package protection so customers can make an informed decision. You might include this information on your shipping policies page, an FAQ section, or the checkout page.
Let’s review a few reasons why shoppers might want to purchase insurance for their package:
- Peace of mind. Shipping protection ensures that a shopper’s purchase is covered in case of loss, theft, or damage during transit. This provides peace of mind from the moment they click “Check Out.”
- Financial security. With shipping protection, customers don't have to worry about the financial loss associated with a missing or damaged package because they can easily get a refund. This is especially important when buying something expensive or fragile.
- Hassle-free claims filing and resolution. The best shipping protection providers have a simple, straightforward claims process that doesn’t involve jumping through endless hoops. This allows customers to resolve problems quickly and without the frustration of lengthy negotiations or disputes with carriers.
- A shopping experience they can trust. Consumers often have a hard time knowing which ecommerce stores to trust. Third-party shipping insurance is evidence that you care about your customers' satisfaction and are committed to providing a reliable and secure shopping experience.
That’s the shopper’s perspective—but what about a merchant’s point of view? Shipping insurance has just as many benefits for sellers.
As a Merchant, Is Shipping Insurance Worth It?
Without shipping insurance, you’ll lose revenue every time a product gets lost, damaged, or stolen. Not only do you lose the value of the product, but you also have to pay for a replacement or reimbursement, and deal with customer fallout.
What about situations where a package is stolen from a doorstep or porch? Though you’re within your rights to deny responsibility for package theft, you could face consequences: negative online reviews, chargebacks, and lost customers.
Insurance provides the perfect solution, helping minimize lost revenue by covering the cost of lost or damaged goods.
Offering shipping protection has other perks too. It builds trust with shoppers, which in turn fuels brand loyalty and encourages repeat business. Additionally, having insurance can boost conversion rates by providing an extra layer of reassurance during the purchasing process. Shipping insurance also simplifies the resolution of shipping issues, saving time and resources that can be better spent on growing your business.
Is Shipping Insurance Right for Your Business?
The benefits of shipping insurance apply to all businesses, but you have to weigh them against the costs. So, is shipping insurance right for you? To determine the answer, consider several key factors:
- Product value. If you sell high-value products, insurance is crucial to protect against significant financial losses from theft or damage.
- Order volume. For businesses with high order volumes, shipping insurance can mitigate the cumulative risk of shipping-related issues, ensuring smoother operations and financial stability.
- Shipment distance. International shipments, which are subject to more complex logistics and higher risks, particularly benefit from shipping insurance to cover potential losses.
- Product fragility. If you frequently ship fragile items, the likelihood of damage is higher. Insurance is a wise investment to avoid the costs and customer dissatisfaction associated with damaged goods.
Ready to get started with shipping protection? Add a buyer-purchased insurance option to your ecommerce store with Norton Shopping Guarantee. Free for merchants, Norton Shopping Guarantee makes it simple for shoppers to protect their shipments. It’s also the only insurance offering on the market that comes with a shopping guarantee that safeguards buyers from scams, price changes, and identity theft.
Add insurance to your Shopify or WooCommerce website. To learn more, you can also reach out to one of our ecommerce specialists.
