Studies show that 1 in 10 packages delivered by major carriers are damaged or otherwise harmed in transit.
Worry not, shipping insurance can help you navigate these situations without sacrificing your ability to provide strong customer service.
While buying insurance may seem like an unnecessary cost before shipping your goods, you’ll be thankful for it when a large shipment is damaged or expensive freight is lost.
Carriers offer shipping insurance, each employing their own policies and protocols. Companies should familiarize themselves with the policies of major carriers and third-party insurance providers to find the shipping insurance that covers needs at the lowest possible cost.
This article will examine coverage options offered by large carriers and third parties while providing insight into the claims process. That way, you’ll be best positioned to get the most out of your shipping insurance.
Understand What’s Covered
Shipping insurance should be a part of how you choose a carrier that’s right for your company.
All carriers offer their own unique policies for shipping insurance, covering some small shipments at no extra charge or excluding some types of freight from any coverage at all.
Understanding these differences will enable you to choose the insurance provider that best suits your company’s shipping operations.
As shown below, USPS, FedEx, UPS, and DHL all have their own individual costs, automatic coverage offerings, and value limits for their shipping insurance options.
Shipping Insurance Overview: Major Shipping Carriers
Notably, FedEx, UPS, and DHL all automatically cover shipments up to $100 in value at no additional cost to the shipper. USPS does not offer the same level of automatic coverage. Additionally, all but DHL declare a maximum value that their insurance is able to cover.
Beyond these general guidelines, there are some exceptions to what is and isn’t covered by these carriers. For instance, many carriers do not insure precious stones or coins.
In your effort to understand what is covered by the major carriers, it’ll be helpful to review similar freight exclusions that may limit your return on investing in shipping insurance.
When researching possible shipping insurance options, your company will be best served to develop a well-rounded understanding of insurance protocols from carriers you’re likely already using to ship products. Then, use your research to determine which carrier best caters to your needs.
Strengthen Claims With Documentation
Insurance claims are much easier to fill out with documentation. Properly documenting loss or damage will make for a faster, smoother, and easier claims process.
To clarify and strengthen your claim, take notes and photographs of the freight to prove that it was damaged or otherwise compromised in transport.
Most importantly, holding onto documents like the original bill of lading, a paid freight invoice, and a packing slip will be helpful in allowing you to identify and file for one of the 3 following freight claims:
- Loss: This type of claim accounts for freight that is ordered but never makes it to its destination. In this case, you’ll never sign for the delivery, so you can rely on documents like a bill of lading to claim that freight was lost.
- Damages: You can claim damages if there is visible harm to freight as it’s being delivered. If this is the case, make sure you document it on the proof of delivery document.
- Shortage: Claiming shortage means that you did not receive the full amount of freight listed in the bill of lading. In this case, closely examine and compare delivery receipts with the freight that has been delivered.
In some cases, damages or shortage cannot be determined at the point of delivery. When there is a concealed damage or shortage that’s discovered after the proof of delivery is signed, it can often be more difficult to get your full claim back.
Spotting concealed damages earlier increases your chances of being successful in the claims process. It’s essential to thoroughly examine incoming shipments for quality and document anything that may seem out of order before signing for the delivery.
Spotting concealed damages earlier increases your chances of being successful in the claims process.
This is especially true when receiving freight that’s prone to damage. Fragile shipments should be carefully looked over upon delivery for this reason. It may also be beneficial to be alert to potential shortages when freight has been shipped a long distance.
After filing a claim, the carrier is required to acknowledge receipt of the documents within 30 days. Shippers that provide accurate and clear documentation surrounding the claim are more likely to receive money back, validating their original investment in shipping insurance.
Documentation is critical because it’s the way your company can prove loss, damage, or shortages in the insurance process. Leverage it strategically for the most success with claims.
Explore Third-Party Options
Large carriers aren’t the only organizations that offer shipping insurance to companies. There are also plenty of third-party options that provide businesses with their own benefits.
Oftentimes, third-party insurance providers have the ability to offer cheaper rates and cover higher value shipments than some of the major carriers.
For instance, Stamps.com functions as a third-party provider, as the organization is not responsible for carrying shipments from one location to the next. Stamps.com offers both USPS insurance and their own, unique option.
Their insurance web page indicates that Stamps.com insurance is at least 10% cheaper than USPS options, and companies can expect up to 40% savings with the company. Additionally, Stamps.com pledges to insure shipments of up to $10,000 in value. That’s twice the declared value limit of their USPS counterpart.
This offering benefits companies that would otherwise have to split up their shipments to fall within the covered value of USPS. Stamps.com invites organizations to be more efficient in their shipping by covering more expensive shipments.
Opting for a third party also affords businesses the opportunity to collaborate with a smaller, more nimble provider. Large carriers may not offer the fast-paced, personable services your company is looking for.
Opting for a third party affords businesses the opportunity to collaborate with a smaller, more nimble provider
By expanding your scope of insurance options, you’ll find providers whose coverage and business model most closely align with your needs.
Shipping Insurance Allows You Peace of Mind
In your company’s daily operations, the last thing you want to worry about is the potential for significant loss due to damage or shortage.
Investing in shipping insurance based on your thorough understanding of carrier and third-party options as well as the importance of documentation will help you get the most out of your insurance plan, giving you peace of mind in your shipping procedures.
How LateShipment.com Can Help
Since you get to know well in advance if a package is flagged as lost or damaged, it gives you an edge when you get in touch with the carrier to resolve the issue or send a quick replacement in case of a time-sensitive delivery.
While sending a replacement product or a discount in the next purchase prevents the bad delivery experience for the customer and keeps them shopping with you, our automated refunds process effortlessly audits all your shipping invoices and helps you recover refunds for over 50 service failures including lost and damaged shipments thereby saving up to 20% of your shipping costs.
At LateShipment.com, our focus has remained steadfastly on the last mile, typically the part of the logistics chain that is the most opaque.
The best part is, LateShipment.com has a simple signup process, which takes less than 2 minutes for you to get started.
The value we add to businesses is most evident when experienced first-hand. See it for yourself.