How to handle common shipping risks for online businesses

Whether you handle your own shipments, work through a freight broker or contract out your shipping needs, your reputation and success depends on getting your products into the hands of your customers on time and in perfect condition. Understanding your shipping risks is key to ensuring both.

What are your risks?

It’s important to understand the factors that can affect your shipments, what will cause setbacks, and what can both increase your costs and damage your reputation. These can include the following:

  • your goods may be lost due to shipper negligence
  • your shipment may be delayed by weather, traffic accidents or overturn
  • damage to goods can arise due to storms, or during loading or unloading
  • depending on what you’re shipping, the contents can be vulnerable to extreme temperatures
  • even the technology that helps you and your customers track shipments is vulnerable to hacking that could affect or intercept your products or breach your customers’ data – or both.

Cargo theft

Cargo theft costs Canadian companies up to $5 billion annually. Products that are easy to sell and difficult to track, such as jewelry, are especially vulnerable to cargo theft. Many of these thefts are a result of tip-offs inside the supply chain, such as paying off sources at depots or warehouses and lining up buyers for the stolen merchandise before the theft. If your goods are susceptible to this kind of fraud, work with your insurance broker  to find ways to reinforce your supply chain.

Contract shipping

As your business grows, you may find that you have less time and fewer resources to handle shipping  on your own. If so, consider contracting the work out to a load broker or freight forwarder. A load broker, also known as a freight broker, acts as a liaison between you and the companies you ship with, while a freight forwarder provides full-service shipping for imports and exports. For a negotiated rate, they’ll handle shipping logistics for you and assume some of your risk. Do a background check to ensure they work with a reputable transportation firm and that they have appropriate coverage in place for lost or damaged products, including Errors and Omissions insurance.

Check your contract

Whether you deal with a freight forwarder or directly with transportation companies, insist on a clear and comprehensive contract. Although not an exhaustive listing, your contract may include the following:   

  • bills of lading (proof that a carrier received goods from you) for direct carriers with shipment details and other critical information
  • relationship and responsibilities for load brokers and freight forwarders
  • insurance coverage expectations
  • refrigeration/special handling requirements for your products, if necessary
  • temperature control expectations, packaging, wrapping and labelling for your products if required


A variety of coverages are available to protect your shipments. A bill of lading offers some limited protections, and the purchase of transportation floater insurance can provide you with coverage. You may also be able to purchase additional coverage from your transportation company and transfer risk to them.

Talk to your insurance broker about your shipping processes, insurance options and the extent of coverages available to protect you and your business. Your broker can also help ensure you have the appropriate coverage, so you don’t pay more than necessary. If you don’t have an insurance broker, use our Find a Broker tool to find one in your area today.


Cargo theft. (n.d.). Insurance Bureau of Canada. Retrieved from

Levins, C. (2018, November 5). Who is most susceptible to cargo theft? All Things Supply Chain. Retrieved from

Simpson, B. (2018, July 11). Cargo theft rising in Canada. Transport Topics. Retrieved from

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