A delayed or damaged shipment can result in client dissatisfaction and the business losing its income. However, no matter how hard you try, some situations are unavoidable. While shipping, things may work against your expectations. For example, your fragile merchandise can be damaged while in transit. In addition, your products may get lost or stolen in transit. What do you do?
Getting insurance will protect your shipment in transit, and in case of theft or damage, you´ll be reimbursed your money.
We’ve covered all you need to know about shipping insurance in Canada, including what it covers, its costs, and whether to buy it or not.
Let’s get started.
What Is Shipping Insurance?
Shipping insurance is a policy that protects shipments in transit. This policy covers several high-value products from the time you ship to the time it arrives at its final destination. Insurance covers in Canada cushion shoppers against damage, theft, misplacement, and physical loss. If goods are mishandled and, in the process, damaged, the insurance company or the shipping company compensates the shopper against the declared package value.
You can purchase shipping insurance in Canada from national shipping companies like FedEx, UPS, USPS, and Canada Post. Alternatively, you can buy insurance from third-party insurance companies. The good thing about third-party insurance companies is that they offer insurance coverage at a lower rate than other shipping companies.
What Does Shipping Insurance in Canada Cover?
Shipping insurance in Canada covers several products. However, protection levels may vary depending on the carrier you opt for. In general, your shipping insurance will protect your shipment against the following:
Lost products in transit
Damaged or broken items
Stolen packages
Shipping malpractice
Delivery delays
As earlier said, shipping insurance doesn’t cover everything. Below is a list of products shipping insurance doesn’t cover:
Luggage
Artwork
Liquids
Currency, bills, and
Personal items
Hazardous materials
Perishable products and live animals
Confirm with your carrier on the list of items their insurance covers.
Safeguard your precious shipments like never before – Get up to $25,000 in shipping insurance with ShipSimple.ca!
Don’t just save on shipping costs, invest in peace of mind. Request a FREE demo and embark on a journey of seamless and secure shipping experiences with ShipSimple today!
How Much Does Additional Liability Coverage Cost?
Shipping insurance is less expensive than you may perceive. However, carriers charge different shipping insurance rates for domestic and international shipping. Besides, several factors determine the shipping insurance rate. Below are the common ones.
The package value: It makes sense that high-value packages attract higher shipping insurance rates, considering you´ll pay more to replace damaged or lost products.
Shipping distance: The destination of your shipment will also affect the shipping insurance rate. International shipping with far destinations attracts higher insurance rates due to the risks involved.
Shipping volume: The more you ship, the higher the shipping cost.
Shipping destinations: Shipping destinations go hand in hand with shipping distance. The farthest destinations attract higher insurance rates than destinations near the source zone.
Your claims history: The number of times you´ve filed loss claims affects the shipping insurance rate. You´ll be charged more if you´re highly likely to file for a claim.
Major Canadian carriers charge different shipping insurance rates. For instance, Canada Post provides free insurance coverage for regular parcels. However, Flat rate boxes, Priority, and Xpresspost shipping services have insurance coverage up to $100 in declared value. If shipping packages with a value above $100, consider an additional liability coverage. You can cover up to $ 5,000 in declared value with Canada Post.
Other national carriers, including UPS, FedEx, and Purolator, offer insurance coverage up to $100 in declared package value. However, for additional coverage for packages worth more than $100, FedEx charges $2, and UPS charges $5 per $100 of coverage.
Shipping Insurance in Canada
Let’s explore different carriers in Canada.
Canada Post
Canada Post shipping insurance covers up to $100 in declared package value. This insurance policy applies for Priority, Flat Rate Box, and Xpresspost shipping services. For additional liability coverage, you must pay an extra fee. The good thing about Canada Post is that you can cover up to $5,000 in declared value.
UPS
Like Canada Post, UPS offers free shipping insurance coverage up to $100 in declared parcel value. However, when shipping high-value packages in large volumes exceeding $100, you must pay an extra fee. You can cover up to $50,000 worth of shipments with UPS.
FedEx
FedEx provides coverage for packages up to $100 in declared value. However, additional liability coverage for products above $100 comes at an additional fee. You´ll pay $3.90 for packages worth $100.01 to $300.00. However, for each additional $100 worth of package, you´ll pay an additional $1.30.
USPS
USPS has exclusive shipping insurance coverage: Priority Mail, Express, and Global Express Guaranteed cover up to $100 on declared parcel value.
Below is a summary of their shipping insurance rates.
$0.01 – $50: $2.65
$50.01 – $100: $3.40
$100.01 – $200: $4.30
$200.01 – $300: $5.65
$300.01 – $400: $7.10
$400.01 – $500: $8.60
$500.01 – $600: 11.50
$600.01 – $5,000: $11.50 plus $1.75 per $100 over $600 in declared value.
Third-Party Shipping Insurance Companies
Third-party shipping insurance companies offer the most comprehensive coverage. Their shipping policies are primarily tailored to your business needs, making it more convenient. Compared to major shipping carriers in Canada, third-party insurance companies are cost-effective, which any Canadian business can afford.
The perfect example is ShipSimple. This shipping insurance company offers an exclusive cargo insurance policy at a minimum charge. ShipSimple caters to both new e-commerce businesses and seasoned e-commerce practitioners, offering stress-free shipping solutions.
Note that ShipSimple and other third-party insurance companies have their restrictions, stipulations, and limitations. Check to determine which products are covered and which ones aren’t before purchasing an insurance policy.
Should I Insure My Shipment?
While the decision to insure your shipment or not depends on you, factors like the volume of packages shipped and the value of the shipment play a pivotal role. If the value of the shipment is below $100, then there´s no need to purchase insurance. However, if the value exceeds $100, purchasing insurance will be worth every cent.
Before purchasing insurance, do a cost-benefit analysis. If the cost of replacing products is less than the shipping insurance cost, then don’t purchase the insurance. However, you must purchase insurance if the cost of replacing products is way more than the shipping insurance cost.
Also, when shipping high-volume shipments, there is a high chance that mistakes occur. Therefore, purchasing insurance makes more sense. T
When Not to Buy Insurance
Not all circumstances demand you to purchase insurance. If the insurance cost is more than replacing your products, then it doesn’t make sense to purchase insurance. However, when you opt for shipping insurance and feel like you paid more the last time you shipped, explore the market for alternative insurance companies. Try third-party insurance companies.
Get Covered Today!
By now, any e-commerce business person in Canada knows the importance of insuring their shipment. One thing you should always remember is to follow safety standards when packing your shipment. This practice reduces the chances of damage or loss of products in transit. In the long run, you won´t have many claim histories, thus reducing your shipping insurance rates.
Your loyal customers will turn away when you delay shipments or deliver them in poor conditions. Taking quick action when issues arise will save the situation. ShipSimple understands all the challenges Canadian e-commerce businesses face. In response, we have developed viable response actions to cushion shoppers against delay, loss, or damage. We track lost or misplaced items fast and deliver them to you immediately.
Moreover, our claims process is fast and fair, ensuring you maintain your projected profit margins. You´re missing out on a lot if you have not joined us. Give us a call today, and we shall sort you out immediately.
0 Comments