This article will give you a clear idea and help you to make a decision if you need insurance for virtual business or not. Here virtual business means an online or ecommerce business. Do you have any such trading ? If yes, then this article is for you.
From now onwards you will not ask anybody whether you need to add shipping insurance or not while shipping an order. On top of that you can claim your insurance benefits using artificial intelligence.
Knowing the present stats will open your eyes as most of the business owners ignored insurance for virtual business.
|Items arrived damaged||1 out of 10|
|Packages lost daily only in USA||1.7 million|
|Daily financial loss due to lost package only in USA||$ 25 million|
|Customers prefer not to come back to that business||70 %|
What is an Insurance For Virtual Business ?
Let me tell you the features of insurance for ecommerce business or a virtual business –
1. Protects against damages during transit
2. Protects when items get lost in transit.
3. Gives you reimbursement of the package declared value.
4. Protects you if the package is stolen.
5. A small fee you need to pay to get a peace of mind during shipment
How Much Does an Insurance for Ecommerce Business Cost?
It is obvious that as an online business owner you are liable to your products. You need to take 100% responsibility for the safe and fastest product delivery to the customer place. For that you need to pay a small amount of fee for the product liability insurance.
This cost depends on the carrier, label generating software, company’s customer service , brand value and so on. You can pass this cost to the customer at your own risk as it mostly discourages the customers from purchasing. Now this is the cost with USPS shipping insurance on the basis of the declared value.
|Declared Value||USPS Fee||UPS Fee||FedEx Fee|
|Upto $ 50||$ 2. 45||0||0|
|$ 50.01 – 100.00||$ 3. 15||0||0|
|$ 100.01 – 200.00||$ 3. 85||$ 3. 45||$ 3|
|$ 200.01 – 300.00||$ 5. 05||$ 3. 45||$ 3|
|$ 300.01 – 400.00||$ 6. 40||$1.15 per $100 declared||$1 per $100 declared|
|$ 400.01 – 500.00||$ 7 . 65||$1.15 per $100 declared||$1 per $100 declared|
|$ 500.01 – 600.00||$ 10 .35||$1.15 per $100 declared||$1 per $100 declared|
|$ 600.01 – 5,000.00||$10.35 + $1.55 per 100 dollars |
over $600 declared value
|$1.15 per $100 declared||$1 per $100 declared|
Finally it absolutely depends on the three main factors where to take an insurance for ecommerce business –
1. Package value
If your package costs less than $ 100 then ship with UPS or FedEx because here you will be covered for the insurance by default without any extra cost. While it is more than $ 100 you can go for any of those 3 providers or any 3rd party shippers of your own wish.
The bulky items like beds, sofas, desks, tables, refrigerators, bunks must have an insurance cover as 21% shipments come damaged or with defects.
So insurance is a very important part in your ecommerce business to transfer the risk or financial losses to the insurance company. You can avoid taking an online business liability insurance only when you ship inside your region or a close distance that you feel safe. Otherwise it will be a wise decision to avail an online store business insurance.