Though major shipping carriers are generally reliable, packages can still get lost or damaged. 

In fact, a recent survey of US adults who received packages in Q1 of 2023 found that 56% experienced damaged packaging, misshipments, or lost shipments. Another report indicated that 49 million Americans have had at least one package go missing.

Regardless of who is at fault, customers often expect e-commerce businesses to cover the cost of damaged or undelivered packages. Rather than absorbing these losses, you can opt for shipping insurance. This article explores the costs and benefits of shipping insurance.

**What is shipping insurance?**

Shipping insurance is a service offered by most carriers that protects shippers against lost, stolen, or damaged packages. 

If an insured package doesn't arrive at its destination or is damaged upon delivery, the shipper can file an insurance claim with the carrier, who will then reimburse the shipper for the declared value of the items in the package. 

Different insurance options are available for shippers, but they are not all the same. Depending on the provider, your policy may:

- Offer additional coverage, such as the cost of shipping as well as the declared value of your shipment.

- Have a cap on the value of goods they cover or the amount they will pay out.

- Require proof that the damage occurred during transit.

**Why is shipping insurance important?**

Shipping insurance is crucial for protecting your bottom line. For instance, if you run an online pottery shop and a $50 vase you shipped arrives shattered, without insurance, you'd have to refund the customer out of your pocket or risk losing the customer’s trust. With insurance, you can make amends with the customer without harming your profits.

**Shipping insurance costs by carrier**

The cost of shipping insurance varies by provider. You can purchase it from an independent company like Shipsurance, or from major carriers like DHL, UPS, FedEx, and USPS. Rates depend on the value of the shipped items. Here are the costs for UPS, FedEx, and USPS:

**USPS Insurance Costs**

| Value of contents | USPS Insurance cost |

|-------------------|---------------------|

| Up to $50.00      | $2.75               |

| $50.01 to $100.00 | $3.50               |

| $100.01 to $200.00| $4.60               |

| $200.01 to $300.00| $6.05               |

| $300.01 to $400.00| $7.60               |

| $400.01 to $500.00| $9.15               |

| $500.01 to $600.00| $12.25              |

| $600.01 to $5,000.00| $12.25 plus $1.90 per $100.00 or fraction thereof over $600 in declared value |

**FedEx Insurance Costs**

| Value of contents | FedEx Insurance cost |

|-------------------|----------------------|

| Up to $100        | $0                   |

| $100.01 to $300.00| $4.20                |

| $300.01+          | $4.20 + $1.40 for every additional $100 of declared value |

**UPS Insurance Costs**

| Value of contents | UPS Insurance cost |

|-------------------|--------------------|

| Up to $100        | $0                 |

| $100.01 to $300.00| $3.45              |

| $300.01+          | $1.15 per $100 declared |

**The 11 Most Common Shipping Mistakes**

Avoid disappointing customers and overspending on shipping.

**How to file a shipping insurance claim**

Filing a claim differs by carrier. Here’s how to file a claim with USPS, FedEx, and UPS.

**File a claim with USPS**

Either the merchant or the customer can file a claim as long as they have the original mailing receipt. Claims must be filed within 60 days for damage or missing contents and varying deadlines for lost packages, depending on the service used.

Required documentation includes:

- Tracking or label number

- Evidence of insurance purchased

- Proof of value

- Proof of damage

Claims can be filed online or by mail.

**File a claim with FedEx**

Log into your FedEx account or enter the tracking/PRO number and complete the online claim form. Upload supporting documents and track your claim status online. FedEx may require inspection of the damaged goods, so keep the items and packaging until the claim is resolved.

**File a claim with UPS**

Shippers or receivers can file claims up to 60 days after the ship date. Log into your UPS account, enter the tracking number, and provide shipment details and documentation, such as receipts and photos of damaged items. Track your claim through the claims dashboard.

**When is shipping insurance worth it?**

Shipping insurance is beneficial in several scenarios:

1. **High volume of orders**: The more packages you ship, the higher the chance of something going wrong. Insuring packages can protect you from occasional misshipments or damage.

2. **Valuable products**: High-value items are more beneficial to insure due to the greater potential loss.

3. **Peace of mind**: For e-commerce merchants, shipping insurance offers extra peace of mind for a small upfront investment.

**How HSO Network delivers ecommerce peace of mind**

Choosing the right supply chain partners minimizes lost, damaged, or stolen shipments.

**Optimize package size to minimize damage**

HSO Network partners with e-commerce brands to optimize shipping. Using technology, they select the optimal size box or poly mailer for each order to minimize damage. They also include cushioning materials to protect goods.

**File claims for you, for free**

HSO Network files claims with carriers on your behalf at no cost, allowing you to focus on your business.

**Connect you with shipping insurance experts**

HSO Network partners with e-commerce platforms and insurance experts to help your brand find the right shipping insurance strategy.