Insurance on Return Shipping
Returns are simply a fact of doing business in e-commerce. Though it is possible to insure packages going to customers, it’s not possible for returns. Since you’re unable to vouch for the contents of a return package, providing a customer with a prepaid or scan-based return label does not include any insurance. The only exception is if you provide a Priority label, which comes with insurance by default. The caveat to this is the sender (your customer) would have to file the claim, which isn’t always likely to happen. In that respect, it’s best to approach returns on non-insured packages.
Cancelling Insurance: Cancelled/Unshipped Orders
Generally speaking, if you buy supplemental coverage through your carrier and cancel the shipment, if you qualify for a shipping cost refund, you will qualify for an insurance refund.
If you use Shipsurance through ShippingEasy, you will automatically be refunded for the insurance charges (as well as the shipping charges) related to any cancelled shipments. See http://bit.ly/CancelledLabel for more information.
For the cancellation policies of any other third-party providers, consult them directly.
This article is an excerpt from The eCommerce Seller’s Guide to Shipping Insurance