When sending valuable or fragile items, one of the biggest concerns is whether your shipment will arrive safely. Even with reliable carriers, accidents and delays can happen. That’s where shipping insurance comes in—it protects both your business and your customers in case of loss, damage, or theft. But is it always necessary? Let’s break down what you need to know.
What Is Shipping Insurance?
Shipping insurance is an optional service that provides reimbursement if a package is lost, stolen, or damaged in transit. While most carriers include limited coverage by default, the amount may not be enough for higher-value items. Businesses shipping frequently may find insurance a smart way to minimize financial risk.
What Do Major Carriers Offer?
Each carrier has its own insurance policies and coverage limits:
- UPS – Automatically covers up to $100 per package, with the option to declare a higher value for an additional fee.
- FedEx – Similar to UPS, FedEx includes up to $100 in declared value protection and allows businesses to purchase additional coverage.
- USPS – Priority Mail and Priority Mail Express include up to $50 or $100 of coverage. Extra insurance can be purchased for higher-value shipments.
- DHL – Offers extended liability coverage for lost or damaged shipments, with limits depending on the service and destination.
When Should You Get Shipping Insurance?
Not every package requires additional insurance. Consider adding coverage if:
- The item is fragile or difficult to replace
- The order value exceeds the default carrier coverage
- You’re shipping internationally, where risks are higher
- Your customer has paid a premium price and expects full protection
How Much Does It Cost?
Insurance costs vary by carrier and shipment value. On average, expect to pay $1–$3 per $100 of declared value. While it adds to shipping expenses, it can save your business from absorbing the full loss of a damaged or missing package.
Alternatives to Carrier Insurance
Some third-party providers, such as Shipsurance and U-PIC, offer discounted insurance rates compared to carriers. These services may be especially helpful for high-volume shippers looking to save on coverage costs.
Final Thoughts
Shipping insurance is not a one-size-fits-all solution, but it can be a valuable safeguard for businesses shipping high-value, fragile, or international items. By understanding carrier policies and evaluating your risk tolerance, you can decide when insurance makes sense for your shipments. For businesses also looking to offset regular shipping costs, cashback platforms like Fluz can complement your strategy by reducing expenses on carrier payments.
