From the National State of Emergency being declared with natural disasters like Cyclone Gabrielle causing floods and damages in several places across New Zealand to reports of parcel pirated plundering mail from thousands of New Zealanders, consumers and even businesses are no strangers to lost, damaged or pirated packages. Add to that the rapid growth of the e-commerce industry, and the increased risks associated with packages in transit comes as no surprise. But since it is only natural to want something of value to be shipped in a safe and timely manner despite the long list of factors that can go wrong during shipping, taking steps to insure your goods becomes one of the most important steps. This is where shipping insurance comes into the picture to protect your assets and even profits. But what is shipping insurance, what does it cover and what benefits do you stand to gain from it?
What is shipping insurance?
Shipping insurance, be it domestic shipping insurance or international shipping insurance, is often an optional and chargeable service that is available to all customers. Just like most types of insurance, shipping insurance is there to cover the full invoice value of your shipment if anything goes wrong during the shipping process should there be an unfortunate or rare event occurring. For example, if the package you’re shipping gets lost or damaged while in transit, this insurance can cover the insured value of the goods and ensure you receive enough funds to cover a replacement shipment. Simply put, shipping insurance assists you in addressing the uncertainties associated with international and domestic shipping. With insurance coverage, you can be confident that your shipment will be fully protected until it is delivered to the intended recipient.
How does shipping insurance work?
Shipping insurance is a general term that refers to insurance coverage for goods being transported, regardless of the mode of transportation, whether it's by sea, air, or land. Moreover, whether you have coverage from sea freight insurance or land transport insurance, the international shipping company you are working with will have different shipping insurance options, situations that they will cover, and the value of the goods that will be covered.
In case of any issues during transportation, your business will need to file a claim with the carrier within the filing claim deadlines. While the claims processing procedures may vary from carrier to carrier, there are some common documents that you'll typically need to provide. These may include the relevant shipping details, receipts, and documentation to substantiate the declared value of the item. By providing these basic documents, you can facilitate the claims processing and help ensure that you receive appropriate compensation for any losses or damages incurred during transit.
What is the cost of shipping insurance?
The cost of shipping insurance is not fixed and can depend on multiple variables such as the type of parcel being shipped, the frequency of shipments, and the value of the shipment. While most carriers offer competitive shipping insurance rates, the cost of shipping insurance will also depend on the unique challenges that come with international shipping and customs clearance.
For example, if you were to insure your shipment in New Zealand with DHL Express, you will first have to select the "Protect Your Shipment" option. Thereafter, you will have to specify the value you want to be covered, which should match the value of your goods as reflected on your invoice. The cost of the insurance can be easily calculated and will typically be available at a fixed quote of NZD$25.00 or 2.50% of the insured value, whichever is higher. This insurance coverage will protect the actual value of your shipment in case it gets lost or damaged while in the care of DHL Express.
