Insure with Shipsurance or Self-Insure?

Purchasing shipping insurance is an extra expense when the other option is not purchasing insurance at all. This practice is commonly referred to as “Self-Insuring”, although, it is better referred to as “Self-Warranting” as if you are pocketing “insurance” dollars and you do not have an insurance license, this is against insurance regulation. However, if you are just warranting that you will provide a refund for any shipping losses you are ok.


We are biased and believe that you should definitely insure your shipments for loss or damage in transit with Shipsurance. Since this is an increased cost for the shipper, self-warranting is an option for many shippers who do not worry about catastrophic losses or many losses in a short period of time. If a shipper chooses to go this route, they typically refund their buyers if anything goes wrong with a shipment with funds out of their own pocket. When purchasing shipping insurance, the shipping insurance company pays the shipping claims.


One factor that is often overlooked when comparing these two practices is fraud protection. Many shipments that are claimed as being “lost” may not actually be lost. There are some savvy buyers that try to claim non receipt even if they received a package. When using a private shipping insurance company, the shipper can request documentation of the claim on behalf of the insurance company. This means the insurance company wants proof of loss, not the shipper. This transfer of authority removes the shipper from the direct line of fire from the recipient (or intended recipient) as the insurance company is requesting the proof, which may require a signed statement from the buyer.


Self-warranting is definitely an option for those that do not expect losses. There are people who don’t have auto or health insurance for this reason, too. However, if you want full, all-risk coverage for a small cost, shipping insurance is a great option. With Shipsurance as your claims department it allows you to focus on your core business and outsource the process to a team of professionals that manage it for you.

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