Shipping logistics is one of the most important aspects of every e-commerce business. It’s a complicated process that takes a lot of attention. There are many things that can go wrong: the package can get damaged, stolen, lost or delivered to the wrong address.
By choosing a specialized logistics company, such as Unival Logistics, you can reduce the occurrence of these unfortunate events, but you can never completely avoid them. However, you don’t have to lose money every time this happens. You can always protect yourself by purchasing shipping insurance.
Some shippers think that buying shipping insurance is unnecessary because they think that the carrier will cover any loss that they are responsible for, but that’s not entirely true. There are many reasons to use shipping insurance, and we have listed five key reasons in this article.
Avoiding Any Financial Loss
Although you can’t completely protect yourself from unforeseen circumstances that can cause damage or loss of the shipment, you can completely protect yourself from the potential financial loss that such incidents usually cause.
A good shipping company or a third party can ensure packages of any given value. By purchasing shipping insurance for your valuable packages you can be sure that whatever happens, your money is safe. The only potential loss left can be losing a customer, but taking out shipping insurance can even help you with that.
Protecting Your Customers
You’re in this business for your customers, so you’re probably aware that customer experience is of crucial importance for the well-being of your business. It is up to five times more expensive to bring a new customer than to keep an old one, and you will keep your old customers by keeping them happy.
Although it’s impossible to guarantee that every shipment will arrive untouched and in a timely manner, you should devote yourself to recovering the potential damage as fast as possible. Shipping insurance guarantees to recover the value of lost and damaged items, so you can act quickly and refund your customer or re-ship the package immediately.
An average customer won’t care about excuses such as bad weather or carrier neglect, because they are doing business with you and are expecting you to fix the situation. However, most customers do understand that these things can happen, and will appreciate your quick response to such problems, making them more likely to return to you.
Avoiding Grey Areas
Major carriers are often unclear about their insurance policy. For example, a lot of people are not aware of the difference between the declared value and shipping insurance, and a lot of carriers are ready to take advantage of this ambiguity.
Declared value stands for the cost of the package stated by the shipper. It’s the carrier’s way of protecting themselves and limiting their liability in case of package loss or damage. If you only declare the value of the package, you would have to file a claim and prove the carrier’s liability in case of package loss and damage.
Most of the major carriers will only cover for loss or damage of the packages up to a certain value. If the value of the package exceeds the amount of their guaranteed coverage, you won’t be able to recover the full value of your shipment. That’s why you should always use shipping insurance when shipping packages of higher value.
If you’re a regular shipper, the chance of losing a major shipment is increasing daily. It’s almost inevitable that someday one of your valuable shipments will get lost, damaged, or stolen, making a great financial impact on your company and potentially running you out of business.
It is cheaper to ship without insurance, but buying insurance protects all your hard work and profit made over the years. Once an unfortunate event makes you lose a valuable shipment, you will be thankful to yourself for purchasing insurance before shipping. In the long run, buying shipping insurance is profitable and beneficial.
Peace of Mind
Running a business has to be stressful, especially if you are in the e-commerce business. You’re earning money every day, but every day carries the risk of losing a valuable shipment. This kind of day-to-day stress can cost you your health and make you wonder why you’re doing this.
Although it’s impossible to break free of stress completely if you’re running a business, you must do everything possible to reduce your exposure to stressful situations. Stressing about every shipment is completely unnecessary because you can cover them all with shipping insurance.
An unburdened mind thinks more clearly, and your business will benefit if your mind is clear. You will have more room for developing new ideas and strategies to improve your business.
If you’re an occasional shipper of packages of lesser value, you can probably get by with only declaring your shipment’s value, because most carriers will recover any damage valued up to $100. However, if you’re a regular shipper and your packages usually exceed that value, the only way to optimally protect your business is by taking out shipping insurance.
Some companies specialize in safely delivering high-value cargo on time. Companies like these offer to ensure packages of any value, even including collectible items, jewelry, or valuable art. Some of them will offer discounts for regular shippers, and you will always be treated as the most important client.