Shipping Insurance:
Protecting Your Shopify Orders

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Running an ecommerce business exposes you to many risks, but the one that can really impact your business very easily is getting your products from your warehouse to your customers. From accidental damage to complete loss, there are a hundred ways in which your products can be affected during the shipping process, leaving dissatisfied customers and a need to replace or repair an item.

All of that costs money, and if you are shipping a lot of products and suffer a number of losses or product damage, those costs can quickly mount up. In fact, it can quickly reach a level that has an impact on your business, so it makes sense to seek out the best shipping insurance solution to protect yourself.
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Shopify Shipping Insurance

Shopify is a well thought out platform that provides almost everything you need to operate an ecommerce store, so it is no surprise that they have a comprehensive shipping insurance solution of their own.

If you are in the United States, have Shopify Payments activated on your store and are on either the Shopify, Advanced Shopify, or Plus plan, you actually get some shipping insurance for free from the company. It is restricted to $200 maximum insurance on each shipping label, and labels must be purchased through Shopify Shipping. However, while these do limit its usefulness, because that insurance is provided by Shopify automatically and at no cost, it can be a useful service as long as you ship relatively low value orders.

If you don’t qualify for the free option or need a higher level of cover for orders, Shopify Shipping Insurance can be purchased separately for each shipping label. Shipping insurance cost is easy to work out in the Shopify system, with domestic insurance costing $0.89 for every $100 of coverage required. For international shipping, it is $1.29 per $100 of cover. All you need to do is work out how much cover you need for a parcel, and you know how much it will cost.

Its seamlessly integrated too, so using Shopify shipping insurance is the easiest option for any business. Just enter the amount of insurance coverage required when creating a shipping label and the rest is taken care of for you. It really couldn’t be simpler.
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Is Shopify the best shipping insurance for your business?

Shopify shipping insurance sounds like the very best option for everyone then, or is it? The free Shopify option is certainly a great option, especially if you are just launching as it is one less thing to think about in those early days. However, what if you don’t qualify for it, or your average order is higher than $200, so the coverage simply isn’t enough? Maybe you don’t want to use Shopify Shipping. Is it still the best option?

Shopify’s own service is good, and the paid one has a lot going for it too, but if you want to use alternative shipping options then you need other arrangements anyway, so what options do you have?

A Third-Party Provider

There are a number of insurance businesses that offer a similar service without the need to use a specific shipping solution. Some offer blanket coverage for a fixed fee depending on shipment volume, others have prices that you add to your shipping costs, which works for you will depend on how your business operates.

These options give excellent flexibility, in that you can set the right amount of insurance cover for every order, and you can use the carrier services that fit your business and customer needs while being sure every shipment has appropriate insurance cover. However, they do require adding insurance costs to every order, which can add to your workload. In terms of shipping insurance cost, this can be a value solution, but the experience does depend on finding the right insurance provider and getting it wrong can introduce problems into your order flow. Ultimately, you are relying on another business to provide the essential insurance every order needs, if something goes wrong, it can delay your operations entirely.
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Carrier Insurance

The other option is to utilize carrier insurance. Each shipping provider offers an insurance option on every service, and this is often the best shipping insurance strategy for several reasons. First, no matter what carrier and what delivery speed you choose for a shipment, it can have appropriate insurance added. If you are using an automated shipping calculator such as Calcurates, where your customers can choose from a dozen or more shipping options, this is even more important, streamlining the process significantly.

That insurance is easy to add too, reducing the workload and making it a much simpler process. Dedicated carrier insurance means that if a shipment is lost or damaged, you are only dealing with a single company during the claims process too.
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Making a Claim

We have looked at the kinds of Shopify shipping insurance available, and how they fit into your order and dispatching processes, but there is another side to this, and that is what happens if you need to make a claim. Shipping insurance cost is something we accept, but if there is a problem, we want to know it will be dealt with.

There is no real winner here, whether you are looking at making a claim with a carrier, a third-party of Shopify itself, the reality is more paperwork than you could imagine possible and a slow process. This is the nature of the industry, even the best shipping insurance.


Shopify shipping insurance is an incredibly useful product, and the free option is a real help if you qualify for it. However, as your business matures and you move beyond Shopify Shipping, alternatives can deliver a better experience that integrates into your shipping process much easier.

Which is right for you will depend on your order values, volume and how shipping fits into your checkout process. For most businesses though, carrier insurance is convenient, offers good value and simply works.
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