Most Shopify stores do not need to insure every parcel. Carriers already include some cover, Shopify includes more on many labels, and for everyday orders a shipping protection program usually handles problems faster and more cheaply. Extra insurance earns its cost on high-value parcels, where one loss would hurt.
For the full background, see our shipping insurance guide.
What cover do you already have?
| Source | What is included | Notes |
|---|---|---|
| UPS | Liability up to $100 per package | Declared value raises it; UPS says it is not insurance |
| FedEx | Liability up to $100 per package | Declared value raises it; FedEx says it does not provide insurance |
| USPS Ground Advantage and Priority Mail | Up to $100 of insurance | Needs a USPS tracking barcode |
| Shopify Shipping labels (US) | Up to $200 on eligible labels | Grow, Advanced or Plus plan with Shopify Payments active |
So for an average $60 order shipped with tracking, you often already have cover for the full value, at least when the carrier is at fault.
When does extra shipping insurance pay off?
- High-value parcels: jewelry, electronics or anything well above $100 to $200.
- Fragile items where damage claims are frequent and expensive.
- International shipments with long routes and more hand-offs.
- Low margins, where one lost parcel wipes out many orders’ profit.
Shopify sells additional insurance on US labels at $0.89 per $100 of coverage for domestic and $1.29 per $100 for international shipments, up to $5,000, administered by Shipsurance. Compare that with your loss rate and average parcel value to see if it pays for your store.
When is insurance the wrong tool?
Insurance reimburses you after a claim. It does not help the customer quickly, and it rarely covers the cases customers complain about most:
- Porch theft after a package is scanned as delivered.
- Delivered but not received claims with no proof of fault.
- Small orders, where filing a claim takes longer than it saves.
That is where shipping protection fits: the customer pays a small optional fee, and your store fixes the order under its own rules.
A simple decision rule
- Every order: offer optional shipping protection so customers get a fast fix.
- Orders above the included cover (about $100, or $200 on eligible Shopify labels): add declared value or insurance.
- Very high-value orders: add signature confirmation too.
- Review quarterly: compare claims paid, insurance spent and protection fees collected, and adjust the threshold for insuring parcels.
How do you decide for your store?
Pull 90 days of orders and count lost, damaged and stolen parcels by value. If almost all are under $100, the included cover plus protection is enough. If the expensive ones are where losses cluster, insure those. See Shopify Shipping insurance vs apps to compare options, and run your numbers in the shipping protection calculator.
To offer protection on your store, see Sam Shipping Protection. Sam is not an insurance provider; it gives you the tools to run your own protection program.
Frequently asked questions
Is shipping insurance required for a Shopify store?
No. Shopify does not require it, and carriers include some cover by default. Whether you add more is a business decision based on order value, loss rate and how much one lost parcel would hurt.
Does Shopify include shipping insurance?
On eligible US labels bought in Shopify, up to $200 is included at no extra cost if you have Shopify Payments active and are on the Grow, Advanced or Plus plan. You can buy more, up to $5,000 per shipment.
Is shipping protection a replacement for shipping insurance?
Not exactly. Shipping protection is a fee customers choose to pay so your store fixes their order quickly; insurance reimburses you. Many stores use protection for every order and insurance only for high-value parcels.
Sources
Part of our guide: Shipping insurance →