Definition - What does Shipping Insurance mean?
Shipping insurance refers to coverage for parcel sent through a carrier that is either damaged or lost during the shipping process. The carrier can cover for the damage or the loss but there are third party insurance companies that sell insurance for shipped parcels.
Insuranceopedia explains Shipping Insurance
Carriers like UPS or FedEx can pay for lost and damaged items that were shipped through them. But one has to follow a process. First, the supporting documents must be prepared. The documents will likely contain the following: the item lost or damaged, the value of the item, proof of shipping, proof of insurance. Then the person has to reach a representative of the carrier and make his claim. The carrier will make an effort to find the lost item and if it fails, it will pay for the value that that is in the document. Usually, for US carriers like FedEx, an item valued at $100 or less will likely be paid soon. It is when the item is of higher value that the carriers can be strict about the documents for the claims.
Third party insurance companies, other than the carriers, can offer insurance, too. They also claim to offer more in terms of loss or damage or theft. Some of them can be cheaper.