Everything You Need to Know About Shopify Shipping Insurance

If you’ve ever waited anxiously till the item you shipped off gets safely delivered to your buyer’s hands, you’re not alone. It’s very common for packages to get damaged or lost in transit, or even stolen from the porch after delivery. 

And if this happens? It’s on you to issue a refund or a replacement. Not only do you lose your money, you lose a healthy portion of your reputation, too. 

To help with this problem, Shopify offers shipping insurance to sellers. In this guide, we explore what Shopify shipping insurance is, the benefits it offers, and how to check if you’re eligible. 

What is Shopify shipping insurance?

If you’re on a higher-tiered Shopify plan and order your shipping labels from Shopify, the e-commerce platform automatically includes shipping insurance of up to $200 (in partnership with Shipsurance) for your packages. At no cost to you.

Shopify’s shipping insurance covers damage, loss, or theft of your shipped packages. While this insurance applies to both domestic and international deliveries, the packages must be shipped out from the US. 

If you’re on one of the basic Shopify plans which aren’t eligible for shipping insurance, you will have to buy shipping insurance — although you can get it through Shopify at a discounted rate (more on this later). 

Benefits of Shopify shipping insurance

• Stress-free delivery to customers: Even if your items do get damaged, stolen, or lost, you can rest assured that you or your customer won’t lose any money.
• Builds trust: You can highlight your shipping insurance on your Shopify store so that customers know that they can shop risk-free. 
• Makes replacement easy: Filing a claim and getting a reimbursement through Shopify for any lost or damaged packages is easy, so you’ll be able to replace your products without any anxiety. There will be no need to file a claim with third-party shipping carriers and wait till they resolve your issue.
• Opens the door to repeat purchases: Customers who have a bad delivery experience with you will likely not purchase from you again. By making sure the packages are insured, though, you ensure a great delivery experience for your buyers, making the way for repeat purchases.

In short, Shopify shipping insurance removes the stress out of shipping your items.

💡 Expert tip: If you have a large inventory, consider getting a commercial property insurance to protect your goods from burglaries, fires, and natural disasters.

Who is eligible for Shopify’s shipping insurance?

To get Shopify’s shipping insurance (of up to $200) at no cost to you, you must meet the following criteria.

• Have a Grow, Advanced, or Shopify Plus plan
• Ship your items from the US
• Have Shopify Payments activated on your Shopify store
• Purchase the labels from Shopify through Shopify Shipping (and make sure they have a tracking number attached)
• If selling internationally, have “Managed Markets” activated on your store and buy your shipping labels from there
• Comply with Shipsurance’s terms of service 

According to Shipsurance’s terms, your packages won’t be eligible for Shopify’s insurance if it contains any items from the insurer’s list of prohibited items. This includes firearms, currency, perishable goods, and so on. 

You also won’t be covered when shipping to countries that would be in violation of US economic and trade sanctions, such as Afghanistan, North Korea, Iraq, Sudan, etc. To know more, read Shipsurance’s complete terms of service.

If you meet all of the above requirements, the Shopify shipping insurance will automatically be added to the items you ship. No extra action needed from you!

How to confirm that your items have shipping insurance

While the details about your Shopify shipping insurance will automatically be included in your shipping labels, here’s how to double-check:

Step 1: Log in to your Shopify store. From your Shopify admin, click on Orders.

Step 2: You’ll see a list of all the orders your store has received. Select the order you want to purchase a shipping label for. 

Step 3: Under the Unfulfilled section, you’ll see an option to Create a shipping label. Click that to generate your label. 

Step 4: Once the label is generated, search for the Shipping Insurance section within it. If you’ve met all the eligibility criteria, you’ll see that the free $200 shipping insurance is included. 

Can you buy additional shipping insurance from Shopify?

Let’s say that:

1. You aren’t eligible for Shopify’s free shipping insurance, (or)
2. You’re selling something rare and valuable (such as a vintage piece or luxury clothing) whose price far exceeds the $200 insurance amount

In these cases, yes, you can buy a separate or an additional shipping insurance from Shopify. In fact, you can purchase insurance for up to $5,000 for your shipments through Shopify. 

Before we go into how to purchase additional insurance, let’s talk rates.

Shipping insurance premium rates 

When buying additional or separate shipping insurance from Shopify, you pay a certain premium amount per $100 of coverage. In other words, you buy insurance coverage in increments of $100. 

Here’s what it will cost you:

• Domestic shipments: $0.89 per $100 USD of coverage
• International shipments: $1.29 per $100 USD of coverage

So, if you want to buy a coverage of $500 for one of your domestic shipments, you’ll pay $0.89 x 5 = $4.45 as your insurance premium.

For a coverage of $500 for an international shipment, the insurance premium would come out to be $1.29 x 5 = $6.45. 

💡 Expert tip: Make sure to factor in the cost of shipping within your insurance. For instance, if your item is worth $375 and your shipping costs are $20, then you should get coverage for up to $400. 

Who can buy shipping insurance through Shopify?

While anybody can purchase shipping insurance, it’s worth noting that there are some exceptions. You won’t be eligible for this if:

1. You’re shipping through USPS First Class Mail
2. You’re shipping through UPS to Puerto Rico

How to buy shipping insurance through Shopify

Here’s a step-by-step guide on buying separate or additional shipping insurance through Shopify.

Step 1: Once you log in to your Shopify store, head to the Orders page through your Shopify admin. 

Step 2: You’ll see a list of all your store orders. Select the order you want to insure for. (Note that this process involves creating and purchasing a shipping label first.)

Step 3: Under the Unfulfilled section, select the option to Create a shipping label. Your shipping label will be generated.

Step 4: If you’re eligible for Shopify’s free shipping insurance, you’ll see it included under the Shipping Insurance section. To purchase additional insurance, select one of these two options: Insure full shipment value, (or) Insure custom amount and enter the amount of shipping insurance coverage you want to add.

Step 5: If you’re not eligible for Shopify’s free shipping insurance, add the amount of shipping insurance coverage you want under the Shipping Insurance section. 

Can you cancel the shipping insurance you purchased?

Yes, you can! As long as you didn’t ship out the product or use the shipping label. All you need to do is simply void the unused shipping label. 

Go to Orders → Shipping labels. Select the shipping label that you want to void and cancel the insurance for. Click Void shipping labels and select the reason. 

You’re all done! The shipping label along with the insurance will be cancelled. 

Since you’ve spent money purchasing the shipping insurance, you’ll receive an insurance premium credit. You will be able to use this credit only on future insurance premium purchases. 

How to submit a shipping insurance claim

If your shipment is late, stolen, or missing, you’ll need to file a claim with Shipsurance directly through Shopify. 

Note: If you have Shopify shipping insurance and insurance by your shipping carrier, you should file the claim with Shipsurance. 

What’s the window to submit your claim? 24 hours after an order has shipped to up to 120 days from the shipping date. 

Here’s how to file a claim:

Step 1: Head to Orders and select the order you want to file a claim for.

Step 2: Click on the three dots (…) and select the option to File a claim.

Step 3: You’ll need to fill out the following information under the Claim details section:
-Claim type
-Discovery date of your damaged or lost package
-Claim reason

Step 4: Enter the amount of money you want to claim under the Claim amount section. This should be equal to or less than the amount you insured for. 

Step 5: Enter your preferred method of receiving the payment under Payout details. Add your contact number and address details if necessary.

Step 6: Enter your email address under the Contact information section.

Step 7: Check the box that says “I have read and understood the disclaimer above,” and click the File claim button. 

You’ll receive an email with your claim order and a link to the Shipsurance portal. Use this to check the status of your claim whenever you want.

All you need to do now is wait for the claim to be reviewed and approved! It’s that easy!

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