Sending packages out into the world can feel like watching your children leave home for the first time. But unlike 18-year-olds heading off to college, packages aren’t facing a tough economy; they’re facing rough handling, bad weather, and opportunistic thieves.
And many of them don’t escape unscathed.
As an ecommerce business owner, understanding how shipping insurance works helps you ensure that both your company and customers are protected when packages get lost, stolen, or damaged.
So, what exactly is insured package delivery, and when should you use it?
What is insured package delivery?
Insured package delivery is a service that provides financial protection for shipments against loss, damage, or theft while in transit. Shipping insurance is offered by most major carriers, as well as third-party providers, and businesses of all sizes rely on it to safeguard their goods and improve customer service.
What are the benefits of insured package delivery?
The most important benefit of insured package delivery is that it acts as a financial safety net, offering reimbursements when packages are lost, damaged, or stolen. These shipping mishaps are more common than you might think.
For example, in October 2023, 17% of Americans reported having had a package stolen in the past three months; the average value of stolen packages was $50. And 44% of U.S. consumers have had a package stolen at some point in their lives.
Like porch piracy, package damage has a major impact on the delivery experience. According to one survey, 81% of online shoppers have returned products because they were damaged or defective.
Insured package delivery gives your business a cost-effective, convenient way to combat these challenges. Let’s look at several key benefits of package insurance.
- Financial protection. Insured package delivery covers your shipments against loss, damage, and theft. With a small upfront fee, you protect the full value of the shipment and avoid larger financial losses.
- Reputation protection. You could have the best products in the world, but if they don’t arrive in good shape, customers could file chargebacks, leave bad reviews, or warn friends and family members to avoid your store. Insured delivery reduces the likelihood of reputational harm by providing customers with prompt refunds and a hassle-free claims process.
- Peace of mind. Insuring your shipments provides reassurance that they’re protected, allowing you to focus on other aspects of your business without worry.
- Customer trust. Customers often wonder whether they can trust online stores to uphold their promises. When you offer insured delivery, you show shoppers that you care about their experience and will guarantee that they receive their orders on time and intact (or get their money back).
How much does insured package delivery cost?
The cost of insured package delivery can depend on several factors, including the value of the shipped items, the insurance provider, and the shipping destination.
Generally, shipping insurance premiums are a small percentage of the package's declared value, often ranging from 1% to 3%. This means that a package valued at $100 might cost between $1 and $3 to insure.
While 1% to 3% is a relatively small amount, those few dollars can add up quickly. To avoid incurring extra expenses, many ecommerce businesses offer customers the chance to purchase package protection at checkout.
With a solution like Norton Shopping Guarantee, shoppers pay a small portion of a product’s price to insure their shipments. When something goes wrong, they communicate directly with the insurance provider to get their refund.
Whether you decide to go with seller-purchased or buyer-purchased insurance, you’ll need to check with your insurance provider to determine the specific costs to insure shipments. They’ll help you explore available options and get rates tailored to your business needs.
When should I use insured package delivery?
Insured package delivery is a smart choice for ecommerce businesses in many scenarios. If your shipments fall under any of the following categories, insurance could save you hundreds or thousands of dollars a year.
- High-value. If your products have significant monetary value, insurance is a must-have to protect your business from financial loss.
- Fragile. For products that are prone to damage, like glassware or ceramics, insurance can provide added protection.
- International. Long-distance shipments often involve more handling and transit risks, making insurance worthwhile.
Finally, high-volume shippers can benefit from insured package delivery regardless of the type of products they sell. When businesses only ship a few packages a day, they might deal with damage or theft claims once every few months—no big deal.
But when you’re shipping hundreds or thousands of packages per day, your customer service team might be bombarded with complaints and refund requests. Insurance takes the load off your team, minimizes the hassle associated with shipping issues, and saves you money on refunds and replacements.
Provide insured package delivery with Norton Shopping Guarantee
The bottom line? Insured package delivery is a simple, effective way to protect your ecommerce business from potential losses and maintain high customer satisfaction.
Of course, you might still be wondering if shipping protection is worth it for your business. To know for sure, you’ll need to consider both the costs and benefits of insurance, taking into account your business’s unique needs and goals. While some merchants will choose to go with seller-provided insurance, others will find that a buyer-purchased option works better for them.
With Norton Shopping Guarantee with Package Protection by EasyPost, merchants can reap the benefits of shipping insurance at no cost to them. Norton Shopping Guarantee’s shopper-purchased insurance provides peace of mind during the shipping process, but that’s not the only benefit. By placing trust badges on your website, you reassure potential customers that your store is legitimate, building trust and increasing conversions.
Get in touch with our team to discuss how Norton Shopping Guarantee can benefit your business.
Norton Shopping Guarantee is available for Shopify and WooCommerce stores.
