Why You Can’t Afford To Ignore Things Like Small Parcel Shipping Insurance Claims Rules

The e-commerce revolution has enabled small businesses to cater to clients and customers situated all over the world. While communication, placement of order, and even the payment for the same can be made online, you will have no option but to rely on conventional shipping services to ensure the customer receives the product that he or she has purchased from your firm.

Now, as an ordinary individual, you may not have bothered much about things like rules related to small parcel shipping insurance claims. After all, you would rarely send something valuable enough to require the protection of an insurance policy. However, things will be different when you finalize the dispatch of a small parcel to your customer.

You need to insure this parcel for the following reasons:

a. The product has value and the transaction involves inherent risk of loss of the product in case it is damaged, destroyed, or lost in transit.
b. The loss of the product will result in the inevitable question—who bears the loss? The owner of the product must bear the loss, which, in this case, can be you, the seller, or the buyer depending on the terms of the contract.
c. In the event you continue to remain the owner until the product is received by the buyer, then you obviously need the protection of the insurance policy.
d. Even if the terms of the contract allow for transfer of ownership immediately upon dispatch of the parcel, you may still have to insure the product to protect your goodwill. The buyer can hardly be expected to insure a product that is being sent from your office.
e. Technicalities apart, the buyer won’t be pleased with a situation where he or she pays for the product but gets nothing in return simply because of an error committed by the postal service.

Now that it is pretty clear that you cannot avoid buying insurance, you need to focus on the eventuality of filing a claim on the policy in event of loss of the product. Can you file the claim on behalf of the buyer or should it be initiated only by the buyer? Within what time frame must the claim be filed? What exclusions, for eg. Act of God or an act of terrorism, are indicated in the policy contract?

You will have to either analyze all these points on your own or work with an expert who specializes in taking of such seemingly-minor aspects of such an important business transaction. In any case, you just cannot afford to commit the mistake of thinking that rules related to shipping insurance claims are unimportant simply because such an eventuality seems unlikely today.

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