Navigating global trade: Crucial role of shipping insurance

Vietnam's role in the global market is expanding significantly, with exports in June 2023 alone reaching US$55.812 million, according to data by Vietnam Customs as reported by Vietnam Briefing. This impressive volume includes high-demand items such as computers, electrical components, and telecommunications equipment, predominantly exported to major markets like the United States of America (USA), China, Japan, and South Korea.

Given Vietnam's major involvement in such a fast-paced arena of international commerce, shipping insurance is paramount. 

How, so you ask?

Far from being a luxury for large consignments alone, shipping insurance extends to cover every parcel and package, ensuring that businesses are safeguarded against the risks of transit. This insurance is vital for providing compensation for lost, stolen, or damaged goods, calculated as a percentage of the declared value. Such coverage is not merely about risk management; it's about building resilience in the supply chain.

As a leader in this field, DHL Express offers comprehensive shipping insurance solutions that protect a wide array of goods during transit. But what exactly are the benefits of opting for DHL Express to insure your shipments?

What is shipping insurance?

But first, it's crucial to understand what shipping insurance is before deciding to invest in it. 

Shipping insurance is an optional service that allows businesses to be financially compensated if their shipments are lost, stolen, or damaged during transit. Simply put, this type of insurance acts as a financial safety net for the shipped goods. 

And given the complexity of modern logistics, where packages can easily get lost or damaged, shipping insurance is an invaluable layer of protection.

What does shipping insurance do and what does it cover?

Safeguarding businesses against the losses associated with transit mishaps aside, how does shipping insurance work?

As mentioned, it covers losses that may occur due to misplacement, theft, or damage, ensuring businesses do not bear the cost of these unforeseen events. This means that if a package is lost, stolen, or damaged, the shipping insurance will kick in to reimburse the shipper for the covered value of the goods. 

However, it is crucial to note that this is distinct from standard liability, which many carriers offer at no additional cost. 

Unlike shipping insurance, which allows for full coverage up to the declared value to provide more comprehensive protection, standard liability only covers a fraction of the shipment’s value—it may provide some protection but often does not fully compensate for the total value of lost or damaged goods. 

Is it necessary to get shipping insurance?

Given this level of coverage, a common question amongst businesses in Vietnam is whether they should even invest in it in the first place.

For businesses in Vietnam that are involved in international shipping, the necessity of shipping insurance cannot be overstated. 

Here's why investing in this coverage is crucial:

• Financial safeguard: The replacement costs for lost, stolen, or damaged goods can be substantial, particularly for high-value items integral to your business operations. Shipping insurance mitigates these financial risks, covering the full or declared value of the goods and ensuring that businesses are not out of pocket in such situations.
• Enhanced customer satisfaction: Shipping insurance naturally improves customer's overall satisfaction and trust in your service. And since, in today's e-commerce environment, customer satisfaction is paramount, providing this layer of transparency can help secure repeat customers.
• Protection from transit risks: Consider unpredictable incidents, such as the recent maritime accident on July 13th, 2023, near the Thi Vai River in Ba Ria-Vung Tau Province, where a collision led to significant infrastructural damage. Events like these, while rare, highlight the vulnerabilities in even the most secured transport routes and underscore the importance of having insurance to cover potential losses from such unforeseen events.

Understanding shipment insurance by DHL Express

DHL Express provides a robust selection of optional services designed to secure your shipments comprehensively. 

Among these, DHL Express offers tailored shipping insurance options, ensuring that your valuable or personal shipments are well-protected, granting you peace of mind in the event of physical damage or loss. 

These include:

1. Standard liability

DHL Express includes standard liability at no additional cost, covering a portion of your shipment’s value in cases of direct loss or damage from the moment it is received to the point of delivery. This basic coverage serves as a safeguard, providing limited financial protection without extra fees. 

It’s important to note that while this coverage is automatic, it only compensates for a fraction of the potential value lost, making it suitable for less valuable shipments.

2. Extended Liability for documents

For shipments containing critical documents, such as passports, visa applications, or regulatory certificates, DHL Express offers extended liability. This specialised optional service increases the standard coverage limits, ensuring higher compensation in the unfortunate event of loss or damage to these crucial items. 

3. Shipment Value Protection

Shipment Value Protection is another optional shipment protection service provided by DHL Express, designed for high-value goods. This comprehensive protection is highly recommended for expensive or personal items, offering coverage that extends well beyond standard liability. 

With Shipment Value Protection, you secure financial reimbursement based on the full declared value of your shipment, ensuring that you are covered in full against physical damage or loss during transit.

Benefits of insuring your shipment with DHL Express

Securing your shipments with DHL Express offers numerous advantages, bolstering your business operations and elevating customer satisfaction. 

Some of these include:

1. Comprehensive coverage

DHL Express offers comprehensive shipping insurance that covers the full invoice value of your shipments. This flexible coverage can be tailored to fit the specific value, destination, and risk factors associated with your cargo. 

2. Peace of mind

Investing in shipping insurance, especially under terms like Cost, Insurance, and Freight (CIF), offers businesses undeniable peace of mind. This is because, under CIF, the seller is responsible for the goods up to the point they are loaded onto the shipping vessel, covering all costs, insurance, and freight to the destination port. 

This arrangement not only safeguards the goods during transit but also ensures that any costs related to damage or loss are managed by the seller until final delivery, enhancing buyer satisfaction and trust. 

Therefore, by minimising the financial risk to buyers and providing assurance that any potential losses are covered, you can not only protect the financial aspects of international trade but also solidify the buyer-seller relationship.

3. Simple and hassle-free claims process with DHL Express

DHL Express streamlines the claims process, making it straightforward for businesses to handle unexpected shipment issues. 

Here’s a simplified overview of the steps involved:

• Step 1: Initiate your claim

To start, you can either file a claim online or contact your local DHL Express customer service directly via email. Be sure to submit your claim within 30 days of the date your shipment was accepted by DHL Express. You'll need to input the 10-digit Air Waybill (AWB) number and undergo basic verification to confirm your identity as either the sender or recipient. 

• Step 2: Claim evaluation

Once your claim is lodged, it is assigned to a dedicated claims agent. You will receive confirmation that your claim is under review. Should further details be required, a claims form will be provided for you to complete.

• Step 3: Submit necessary documentation

The resolution of your claim will often require additional documentation, which may include photos of the damage, receipts, or other pertinent records. Ensure all documents reference the Waybill number to streamline the review process.

Within about three business days, expect an update from a DHL Express representative regarding the outcome of the investigation. Upon successful claims approval, your case proceeds to our claims department for reimbursement.

How to insure your shipment

Securing insurance for your shipments with DHL Express is a straightforward process. 

Here's a step-by-step guide on how to ensure your goods are protected:

1. Start your shipment booking
2. Opt for insurance: Look for the 'Protect Your Shipment' option during the booking process.
3. Select insurance: Tick the 'insurance' box to add shipment insurance to your package.
4. Declare the value: Enter the declared value of your shipment, which should match the value stated on your invoice. It is crucial to accurately declare the total value of the items being shipped. This will determine the coverage amount in case of a claim.
5. Confirmation

Pricing structure for DHL Express shipping insurance

Below are the details of the costs associated with DHL Express shipping insurance:

*Our Shipment Insurance provides worldwide coverage during transit, with occasional restrictions due to factors like political or terrorist risks. Exclusions include:

• delay
• ordinary leakage
• loss due to insufficient packing or the inherent nature of the shipment

• losses from willful misconduct, delay, or use of atomic weapons or radioactivity

Example of insurance cost calculation:

• Shipment value: VND 1,000,000
• Insurance rate: 1.50% of the shipment value or a minimum of VND 315,000

Since 1.50% of VND 1,000,000 equates to VND 15,000, which is below the minimum fee, the insurance cost would be the minimum rate of VND 315,000. 

What to look out for when purchasing shipping insurance

When considering shipping insurance, it's essential to scrutinise the details to ensure your business's assets are fully protected during transit. 

Here's what to keep in mind to maximise coverage and minimise risks:

1. Understanding the policy’s terms and conditions

Familiarise yourself with the key terms that define the scope of the insurance, such as covered perils and the claims process. Be particularly vigilant about exclusions and limitations; not all items or scenarios may be covered. 

For instance, while most carriers offer coverage for a wide range of goods and destinations, high-risk areas or particular products might be excluded from standard policies.

2. The importance of proper packaging

Proper packaging is not just about protecting your shipment; it's also a compliance requirement for many insurance policies. In fact, insurers often deny claims due to inadequate packaging, so it's important to adhere to the best practices for packaging your goods securely. Some of these ways include using quality materials and ensuring that items are cushioned and stabilised to withstand the rigours of transit. 

3. Detailed claims process

Efficiently manoeuvring through the claims process necessitates familiarity with its steps and the necessary documentation. Initially, report any damage or loss as soon as it is discovered, and gather all pertinent evidence, such as photos of the damage and any corresponding paperwork. Submitting a detailed claim promptly can help expedite the review process. 

Plus, most insurers will have to investigate the claim by reviewing the provided evidence and may require additional documentation or assessments. Therefore, mastering the timeline and maintaining proactive follow-ups are key to facilitating seamless and efficient processing of your claim.

Ace international shipping with DHL Express shipping insurance

Shipping insurance is not just a cheap solution that helps mitigate risks; it's a strategic step towards enhancing business operations and building enduring customer trust. 

And with DHL Express, you're not just sending goods; you're delivering confidence and reliability. Whether it's safeguarding against loss, damage, or theft, DHL Express' shipping insurance ensures that your shipments are well protected.

Consider the added security and advantages of opening a DHL Express business account and embrace the peace of mind that comes with comprehensive shipping insurance while navigating the complexities of global trade.