Shipping protection vs shipping insurance.
The two get used interchangeably, and they should not be. One is a policy you buy and claim against. The other is a checkout offer your customers fund. The difference shows up in who waits, who pays, and who earns.
Shipping insurance is a policy the merchant buys from a carrier or insurer; when a package is lost or damaged, the merchant files a claim and waits to be reimbursed. Shipping protection is an optional add-on the customer buys at checkout; when something goes wrong, the customer gets an immediate replacement or refund, and the merchant keeps a share of the protection fees as revenue.
The comparison
| Shipping insurance | Shipping protection | |
|---|---|---|
| Who buys it | The merchant, per shipment or as a policy | The customer, optionally, at checkout |
| Who files the claim | The merchant, with the carrier or insurer | The customer, on a self-serve branded page |
| Resolution speed | Weeks; claims can be denied | About a minute to file, replacement moves immediately |
| Stolen "delivered" packages | Usually excluded once marked delivered | Covered |
| Customer experience | Invisible; the customer still waits on the store | The product; fast resolution under your brand |
| Cost to the store | A premium on every covered shipment | None; customer fees fund it |
| Revenue to the store | None | Up to 80% of protection fees with Brella |
Why the distinction matters
Insurance answers the question "can the merchant get reimbursed?" Protection answers "does the customer get taken care of, fast, and who pays for that?" A reimbursed carrier claim six weeks later does nothing for the customer who is standing on their porch today. By the time the check arrives, the store has usually already reshipped at its own expense, which means insurance often functions as slow partial recovery on top of a bad experience.
Protection collapses that timeline. Because the resolution is funded by the fee pool and triggered by the customer directly, there is no adjudication gap to bridge, and the interaction becomes a brand moment instead of a support escalation.
When shipping insurance is the right tool
- Rare, high-value shipments: freight, wholesale pallets, one-off items worth thousands.
- Contracts or regulations that require declared-value coverage.
- B2B shipping where the receiver is not a consumer expecting a checkout experience.
When shipping protection is the right tool
- DTC parcel volume, where losses are frequent, small, and individually not worth a carrier claim.
- Stores where porch theft and "delivered but missing" are a real share of incidents.
- Brands that want post-purchase problems handled without support tickets.
- Stores that want the fix to generate revenue rather than add a premium line to costs.
For most Shopify, WooCommerce, and BigCommerce stores, everyday orders fit the protection model. See how it runs in practice in Shopify shipping protection, or put your own volume through the revenue calculator.
Frequently asked questions
Is shipping protection a type of insurance?
No. Shipping protection is a service guarantee funded by optional customer fees at checkout, not an insurance policy. Insurance is a regulated financial product the shipper buys, with claims paid to the policyholder after adjudication.
Does carrier shipping insurance cover stolen packages?
Usually not once the carrier marks the package delivered. A "delivered but missing" porch theft is typically outside carrier liability, which is exactly the case shipping protection is built to handle.
Can a store use both shipping insurance and shipping protection?
Yes, and some do: protection at checkout for everyday parcel orders, and declared-value insurance on rare high-value shipments such as freight or fine jewelry. They solve different problems and do not conflict.
Which one does the customer see?
Only protection. Insurance is invisible to the customer; it is a contract between the shipper and the insurer. Protection is a visible checkout choice, and its claims flow is a customer experience carrying the store brand.