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Shipping Insurance – Do I Need It?

May 28, 2011 | Author: | Posted in Education

Millions of packages get shipped all over the world. Every day. They cross all over the globe, sent from point A and arriving at point B. Whether you’ve sent a package or anticipated the arrival of one, one thing that is universal to the world of shipping is the proverbial “misplaced” package. Coming in at a close second to this phenomenon is the “damaged in shipping” package. While it may seem totally acceptable within the context of how packages are actually transported for delivery to expect an occasional late arrival or damaged en route item, the truth is once you’ve sent your item you really have no power or control over its safety or location. To avoid disappointment and instill a feeling of positivity you can simply insure your package against damage or loss.

While the increased cost of shipping your item in most cases is minimal (*generally 3% of the value of the item being sent), the added sense of security you gain is invaluable. Loss and damage are a part of transportation and delivery systems but insurance will at very least instill the confidence that if something does in fact happen to your sent item, your costs will be covered.

There are a few different ways you can approach shippers insurance.

First things first – always let the buyer choose the insurance option. Leaving the choice up to the buyer is a surefire method of making the buyer feel empowered, they are paying you after all. However, the insurance is definitely a mechanism that is the favor of the seller as it is primarily for the sellers’ protection. If you’re a seller who uses a service such as Ebay, then you’re likely well aware of the regulations regarding loss or damage when using a payment service like PayPal (Ebay deals exclusively with PayPal). If a buyer claims their item has suffered damage while in transit, or worse yet, they never received the item, then PayPal will generally side with buyer in disputes of this nature. If you, as a seller, have purchased insurance, then at least you’ll be protected. The alternative is that you’d lose the item, the money from selling the item, and the shipping costs. It’s because of this precedent that most buyers on Ebay don’t utilize shipping insurance.

Always include insurance with every transaction. Even though the item being sent has been paid for by the buyer, until it actually reaches the buyer it is still technically the property of the seller. Include insurance and you can sleep easy knowing your item is protected. Now, if you add insurance, you have the option of grouping the insurance fee in with the other costs of the transaction (shipping and handling fees) or listing it separately. Regardless of which way you go it is in your best interests as an internet seller to state, clearly, that insurance is necessary. It is unlikely that any buyer is going to complain because you care enough to insure each and every package as part of doing good, reputable business.

When you fill out the insurance forms, it’s best to fill out the item’s value on the open market and not the amount it was sold for to the buyer. If the package is lost or damaged the carrier company you’ve chosen will only reimburse for the actual replacement cost so it makes sense not to over or under insure the item. As a rule, you should always insure items that are high value, highly fragile, electronic or otherwise non-replaceable. For items that do not fall under any of those categories, you can roll the dice and take your chances if you wish.

You can purchase shipping insurance at the post office or just about anywhere that ships packages. You can also print postage labels online through PayPal or USPS that allow for shipping insurance to be added to the cost of the postage for the item. Some of the major name shipping services offer coverage up to a small amount (usually 100$) and parcel tracking as part of the cost of sending the item.

Whichever insurance method you choose to employ, be sure to keep all paper and electronic receipts or transaction records until after you have received confirmation from the buyer that the item has arrived safely and intact at the intended destination. In the event of a claim being filed against you, it will help your case greatly to have proof of date sent, location, item value, carrier, etc. If you really want to cover yourself, take a picture of the item right before you seal the box as proof that it was packed and shipped as described. If a claim for damage is filed against you, make sure that the buyer sends the package back to the company that delivered it and NOT to you – sending the item to you after it’s been opened may invalidate the terms of the insurance.

And finally, don’t purchase insurance and think of it as some kind of substitution for professional and secure packing. Most major parcel carriers will outright refuse a claim if the item appears to have been poorly or hastily packed. Don’t be a good seller, be a great seller.

Troy Frank is a representative of TopMailers. We are a family-owned and operated company dedicated to providing our customers with high quality shipping supplies, great prices, and the best customer service possible. Looking for a padded mailers? Be sure to view our entire catalog online today!

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