The Importance of Shipping Insurance
Shipping goods to customers has become routine practice for most businesses. The world has gotten smaller and international shipping is commonplace. However, there are still so many things that could go wrong with any shipment; it could be stolen, damaged, or just delayed. These issues can cause severe problems, and they might even cause you to breach your terms of sale if you don't take steps to mitigate and resolve them. It's easy to see the importance of shipping insurance, since it can do just this in protecting your goods and your business from harm.
Shipping insurance protects your company
It seems like the world has gotten only more complicated and confusing over the last several years. We have gone through global pandemics, cargo ships getting stuck, the EU losing a member with Brexit, and now see war and sanctions playing a factor too. Shipping chain disruptions have become a reality that most businesses have to deal with. For some branches of industry, there are ways around these problems. However, small businesses need to have a safety net in place to save them if anything happens to their goods.
Shipping insurance can protect your company from a large number of unforeseen circumstances. Goods getting damaged can ruin your new relationships, and you might not have the margin to cover everything. As a seller, you'll need to pay for the initial shipping, then again to replace the damaged items. The importance of shipping insurance will become painfully obvious if you have to pay for damages out of your own pocket. Equally important, yet often overlooked, is the potential damage to your company's reputation. Without shipping insurance, you will have a hard time covering expenses for damaged or lost products.
Unfortunately, if you don't manage to deal with every customer complaint, you can face a lot of negativity from poor customer reviews. Bad word of mouth can sink a business struggling to stay afloat and put even those with the longest-standing success in jeopardy. It's a situation not worth stressing over considering the whole risk can be heavily avoided just by having shipping insurance.
It's better to be safe than sorry
Insurance is a funny thing if you stop to think about it. You want to have insurance, but you don't want to need it in the first place. As with everything in life, it's better to be prepared, and that's where the importance of shipping insurance shines. Insurance can give you peace of mind, and you'll know that whatever happens, you are covered.
That being said, having insurance shouldn't preclude you from taking extra steps to ensure that your shipment is well protected. The experts at Hanson Bros point out that carefully preparing your items for transport is always a good idea. This is especially true for more delicate or bulky items. They can easily get damaged in transportation, and a little bubble wrap can save you all the hassle and delay of going through an insurance claim.
Shipping insurance might be mandatory
Based on your sales contract, you might be obligated to have shipping insurance in place. Incoterms define the obligations of both the seller and buyer for international transactions. They can even define other aspects of the shipment, similar to a Bill of Lading which accomplishes the same on ground-shipments in the US. Understanding every responsibility laid out in the shipping information can help you avoid potentially problematic legal situations.
It's best to review your contract to determine what's required from you. Sometimes the shipping insurance is the seller's responsibility; however, it can also be defined as the buyer's burden. Knowing which coverage, terms, and discounts to ask for takes a lot of experience and knowledge in both cargo insurance and shipping contract law. As such, you can get the help of shipping experts or legal counsel to perform shipment contract negotiations for you and find the best value resources.
It's essential to monitor deliveries for shipping insurance
If something goes wrong with your shipment, assuming you have insurance, the first thing you will do is turn to your insurance provider. Instead of simply taking your word, they will probably require detailed documentation and shipping information. It's up to you to provide that documentation in a prompt matter. We recommend you always review your shipping docs twice to ensure that all parties have filled in their necessary information. Your insurer will probably limit the time you can file for a claim, too. It's best to let your recipients know they'll also have a limited time to report damaged goods. Monitor your deliveries to ensure that everything is done within the allowable timeframes.
What to look for in shipping insurance
You can find many companies that offer shipping insurance. However, getting the right coverage and a good deal can seem impossible to achieve at the same time. When trying to find shipping insurance that's right for your company, here is what you should look for:
Flexible options: try to find a provider who can offer a package most suited to your specific needs
Comprehensiveness: insurance providers should be able to guarantee the safety of your goods while they are in transit.
Experience & knowledge: shipping insurance can be complicated, and an experienced provider isn't only selling you coverage.
An insurance agent should properly explain anything you are unsure about, and similarly will inquire about your business operations and risks to find the proper insurance solution. They are the gateway to purchasing coverage from more complex shipping underwriters, so selecting a quality agent is a great place to start.
Now that we have explained the importance of shipping insurance, you can look into getting the best coverage for your business. Once you know your goods are properly protected, you can relax knowing that you have a solid plan in case of emergencies. Even if your goods get damaged or lost, your business will be able to find a solution and resolve promptly & in full the issues your customers are facing.