All shippers know the importance of having the right shipping protection to safeguard their packages against any threats they might encounter en route to their destination. However, an all too common scenario arises where they rely on their carrier’s insurance policies — aka carrier liability — to pay them out when their shipments are lost or damaged.
More often than not, carrier liability delivers poor outcomes, leaving shippers unpaid for months after claims are filed, and that’s assuming those claims are even approved. Carriers are then left dealing with the brunt of their shippers’ frustrations, dinging their reputation and causing long-term harm to their customer relationships.
To keep this from happening, carriers should offer their shippers “all-risk” protection embedded into the booking path. They can give their customers the flexibility to elect the coverage that fits their needs, and with the right protection partner, a seamless claims experience that gets them paid faster. Fewer carrier liability claims, limited back-and-forth negotiations around coverage and a better customer experience leads to better outcomes for both carriers and shippers alike.
Say a shipment is damaged as it’s being driven across the country, and the shipper is only “covered” through the carrier’s liability policy. They would then need to prove to the insurer that the carrier is responsible for damaging said shipment, for example, if the trucker was reckless with it during the loading process. Even if they’re able to do so, they could be waiting several months for their approved claim to be paid out, all the while contending with the financial loss they’ve sustained. During this time, they’re likely to be reaching out to their carrier and following up with their customer service teams rather than the insurer’s.
Instead of replaying this scene over and over, carriers should look to offer their shippers all-risk protection that provides an overall better customer experience. With all-risk protection, there’s no need to determine who’s at fault — typically, as long as there’s a financial loss experienced by the insured shipper, they get paid out. Shippers enjoy a faster and more straightforward claims process, while carriers benefit from fewer claims on their insurance policies, which could prevent their premiums from rising. Additionally, carriers get an additional stream of revenue from marketing this ancillary service to their customers. And it’s not just carriers — shipping solutions providers and 3PLs can also benefit from offering shippers all-risk protection as an add-on during the booking flow.
Businesses looking to offer their shippers all-risk protection might be wondering where to start, especially as they may not be licensed to sell insurance. That’s where an insurtech partner can step in and provide them with solutions that make sense for their business, as well as the expertise and compliance frameworks to help them expand and scale. Additionally, insurtechs can facilitate an end-to-end customer journey from distribution to claims, so carriers don’t have to worry about guiding their shippers through the process, and instead focus their resources on their core business.
Several third-party shipping insurance companies sell merchants protection at competitive rates, however, they lack the convenience that they desire. Having to seek out and buy third-party protection on their own is just an additional step that shippers don’t want to have to think about, especially through offline channels. By offering shippers protection embedded seamlessly within the booking path, it makes it as easy as possible for shippers to purchase insurance — no extra legwork needed.
Altogether, providing shippers with the option to purchase all-risk shipping protection at the time of booking gives them that extra layer of security they need to operate with confidence. In return, carriers boost customer satisfaction and revenue while decreasing the friction associated with carrier liability claims. Rather than dealing with poor outcomes and customer complaints, they can start building up their brand equity and unlock new opportunities for their business.
