Is Shipping Insurance Worth It? Top 4 Reasons You Shouldn’t Ship Without It

Whether you’re shipping electronics, handmade goods, or important business parcels, things can go wrong. But is shipping insurance worth it? In this blog, we break down the reasons why protecting your packages with insurance is a smart move.

Is Shipping Insurance Worth It? Top 4 Reasons You Shouldn’t Ship Without It

Posted by Tania

If you’ve ever wondered, “is shipping insurance worth it?” — you’re not alone. Whether you’re a small business owner or an occasional shipper, the risk of damage, loss, or theft is real. In this guide, we’ll show you what shipping insurance covers and why it’s worth considering for your most important packages. The short answer? For shipments valued over $100, shipping insurance isn’t just worth it — it’s essential for protecting your business and maintaining customer trust. 

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What Is Shipping Insurance and How Does It Work?

Shipping insurance is protection that covers the full value of your package if it gets lost, stolen, or damaged during transit. Unlike the standard carrier liability (typically limited to $100 CAD), shipping insurance ensures you receive complete reimbursement for your shipment’s declared value.

So, what does shipping insurance cover exactly? Comprehensive shipping insurance protects against:

  • Lost packages that never reach their destination
  • Stolen shipments taken during delivery or from doorsteps
  • Damaged goods that arrive broken or unusable
  • Weather-related damage during transport
  • Mishandled packages that suffer rough treatment

The process is straightforward: you purchase coverage based on your shipment’s declared value, and if something goes wrong, you file a claim to receive reimbursement. Most reputable shipping insurance providers handle the entire claims process for you, dealing directly with carriers to resolve issues quickly.

 

4 Reasons Why Shipping Insurance Is Worth It

1. Protection Against Loss and Damage

The primary reason shipping insurance is worth it comes down to basic risk management. Carriers handle millions of packages, and statistically, some will get lost, stolen, or damaged. Without insurance, you’re essentially gambling with your business’s money.

Standard carrier liability covers only a fraction of most shipments’ actual value. When you’re shipping anything worth more than $100, you’re taking on significant financial risk every time you choose to skip insurance coverage.

2. Peace of Mind for Valuable or Fragile Items

Is shipping insurance worth it for high-value or delicate items? Absolutely. Whether you’re shipping electronics, glassware, artwork, or collectibles, insurance provides invaluable peace of mind.

Fragile items face additional risks during handling, loading, and transport. Weather conditions, rough handling, and equipment malfunctions can turn a perfect product into damaged goods. Insurance ensures these unavoidable risks don’t become business-ending losses.

3. Insurance Claims Are Simpler Than You Think

Many business owners avoid insurance thinking the claims process will be complicated and time-consuming. In reality, working with the right insurance provider makes claims straightforward and stress-free.

Professional shipping insurance providers like FlagShip handle the entire process for you — from filing paperwork to communicating with carriers. You provide documentation of the shipment’s value, and we manage everything else. This saves you time and ensures claims are processed efficiently.

4. Customers Expect a Professional Shipping Experience

Today’s customers expect businesses to stand behind their shipments. When problems occur, how you handle them directly impacts customer loyalty and your brand reputation.

With insurance coverage, you can immediately offer replacements or refunds when shipments go wrong, turning potential disasters into demonstrations of excellent customer service. Customers remember businesses that make things right quickly and professionally.

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Why You Need Shipping Insurance: Your Safety Net for the Unexpected

When Should You Get Shipping Insurance?

While shipping insurance is worth it for most valuable shipments, certain situations make coverage absolutely essential:

  • International Shipping: Cross-border shipments face additional risks from customs delays, international handling, and longer transit times. When should you get shipping insurance for international packages? Always, regardless of value.
  • Fragile or High-Value Items: Electronics, glassware, jewelry, and collectibles require extra protection. The higher the value or greater the fragility, the more critical insurance becomes.
  • Holiday Season or Peak Shipping: Increased package volumes during busy periods lead to higher rates of loss and damage. Peak season shipping insurance protects against elevated risks during crucial sales periods.
  • Custom or Made-to-Order Products: Items that can’t be quickly replaced need insurance protection. The time and cost to recreate custom work makes insurance coverage essential.

How Much Does Shipping Insurance Cost?

One reason many people ask, “is shipping insurance worth it?” relates to cost concerns. The good news is that shipping insurance is remarkably affordable, especially compared to potential losses.

Shipping insurance rates with FlagShip start as low as $1.25 per $100 of declared value. This means protecting a $500 shipment costs just $6.25 — a small price to pay for complete peace of mind.

To put this in perspective: if you ship regularly and experience just one uninsured $500 loss per year, that single incident would pay for insurance on 80 similar shipments. The math clearly shows why shipping insurance is worth it from a pure cost-benefit analysis.

FlagShip offer competitive shipping insurance rates without monthly minimums or long-term contracts, making protection accessible for businesses of all sizes.

 

Carrier Liability vs. FlagShip Shipping Insurance

Feature Standard Carrier Liability FlagShip Shipping Insurance
Coverage Amount Typically limited to ~$100 CAD per shipment. Insure the full declared value of your shipment.
High-Value Limits Low limits; varies by carrier and service. Up to $60,000 CAD (courier) and $100,000 CAD (freight) with premium coverage.
What’s Covered Limited protection; exclusions vary; strict conditions. Loss, theft, and damage during transit per policy terms.
Deductible May apply depending on carrier/policy. Standard: no deductible. Premium: deductible may apply by commodity.
Claim Handling Handled directly with the carrier; timelines vary. Handled through FlagShip for a streamlined experience.
Documentation Carrier requirements; can be strict and service-specific. Provide proof of value and incident details; FlagShip guides you on what’s needed.
Cost Included by default but with very low coverage. From $1.25 per $100 of declared value (choose per shipment).
International Shipments Limits/restrictions vary; may be lower than domestic. Available for domestic and international; review terms for your commodity/destination.
Best For Low-value, easily replaceable items. High-value, fragile, custom, or time-sensitive goods where full protection matters.

Is Shipping Insurance Worth It for Small Businesses?

For small businesses, the question “is shipping insurance worth it?” has a clear answer: absolutely. Small business owners face unique challenges that make shipping insurance essential for success.

Consider an eCommerce seller who ships handmade jewelry worth $500. Without insurance, a single lost package could wipe out the profit from 10-15 other sales, depending on their margins. Even worse, disappointed customers might leave negative reviews or request chargebacks, creating long-term damage beyond the immediate financial loss.

Shipping insurance for small businesses provides:

  • Cash flow protection when operating on tight margins
  • Customer confidence knowing their orders are protected
  • Professional credibility that sets you apart from competitors
  • Scalability to grow without fear of catastrophic losses

Protect Your Shipments the Smart Way

Shipping insurance with FlagShip starts at just $1.25 per $100 of declared value. No monthly minimums, no long-term contracts. It’s easy to add when you ship online — and gives your business the peace of mind you need to focus on growth instead of worrying about what could go wrong.

Ready to ship with confidence? Learn more about FlagShip’s shipping insurance options and protect your business today.

 

So, is shipping insurance worth it?

Absolutely — especially for small business owners who ship regularly and want peace of mind. For just a few extra dollars, you can avoid costly problems, protect customer trust, and ensure every shipment is backed by real coverage. 

The question isn’t whether you can afford shipping insurance — it’s whether you can afford to ship without it. When one uninsured loss can eliminate weeks of profit and damage customer relationships, insurance becomes not just worthwhile, but essential for business success. 

Don’t gamble with your shipments. Protect your business, your customers, and your peace of mind with comprehensive shipping insurance coverage

 

Frequently Asked Questions

Is shipping insurance worth it for every shipment?

Shipping insurance is worth it for any package that would impact your business if lost. While not every shipment requires insurance, anything valued over $100 or containing irreplaceable items should be protected. The small insurance cost is almost always less than the risk of total loss.

What’s the difference between carrier liability and shipping insurance?

Carrier liability provides minimal coverage (typically $100 CAD maximum) and often has strict limitations on claims. Shipping insurance provides comprehensive protection for the full declared value of your shipment, with fewer restrictions and better claims support.

How do I file a shipping insurance claim?

With FlagShip, filing a claim is straightforward. You provide documentation of the shipment’s value and details about what went wrong. We handle everything else, including communication with carriers and processing your reimbursement.

Does FlagShip offer shipping insurance for high-value items?

Yes, FlagShip provides premium insurance coverage for high-value and luxury goods including jewelry, electronics, artwork, and collectibles. Coverage extends up to $60,000 CAD for courier shipments and $100,000 CAD for freight shipments.

How does shipping insurance work in Canada?

Shipping insurance in Canada works similarly to other countries — you purchase coverage based on your shipment’s declared value, and receive reimbursement if the package is lost, stolen, or damaged. Canadian insurance providers like FlagShip offer competitive rates and comprehensive coverage for domestic and international shipments.

Ready to ship with confidence?
Learn more about FlagShip’s shipping insurance options and protect your business today.