What is Shipping Insurance & What Does It Actually Cover?
What is it?
Shipping insurance is a service that reimburses you for the value of a package if it is lost, damaged, or stolen during transit. Most carriers (like USPS, UPS, FedEx) automatically include a small amount of insurance (e.g., $50 or $100) with their services, and you can pay to add more.Why is it important?
It's a risk-management tool. For a low-cost t-shirt, it may not be necessary. But if you're shipping a $150 custom-printed jacket, insurance ensures you don't lose all that money if the package disappears.What It Typically Covers
- Lost Packages: A package that is confirmed lost by the carrier's investigation.
- Damaged Items: The product arrives broken or unusable due to poor handling (requires photo proof).
What It Typically Does *NOT* Cover
- 'Porch Piracy': This is the big one. If tracking says 'Delivered' but a thief steals it from the customer's porch, most *carrier* insurance will deny the claim. They consider their job finished at delivery.
- Delays: Insurance doesn't pay out just because a package is late.
- Incorrect Address: If you (or your customer) provided a bad address, the carrier is not at fault.
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Curriculum: 3.2.5 - Navigating E-commerce Logistics Insurance (Difficulty: Advanced | Path: Scale)
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