Shipping Insurance
What Does Shipping Insurance Mean?
Shipping insurance refers to coverage for parcels sent through a carrier that are damaged or lost during the shipping process. While the carrier may provide compensation for damage or loss, there are also third-party insurance companies that offer insurance specifically for shipped parcels. For businesses that ship products regularly, this type of coverage often overlaps with a broader freight insurance policy that protects goods in transit.
Insuranceopedia Explains Shipping Insurance
Carriers like UPS or FedEx can compensate for lost or damaged items shipped through them, but the process involves several steps. First, the necessary supporting documents must be prepared, which typically include details about the lost or damaged item, its value, proof of shipping, and proof of insurance. Afterward, the individual must contact a carrier representative to file the claim. The carrier will attempt to locate the lost item, and if unsuccessful, it will reimburse the value stated in the documents. For U.S. carriers like FedEx, items valued at $100 or less are usually reimbursed quickly. However, for higher-value items, carriers may be more stringent about the documentation required for claims.
In addition to carriers, third-party insurance companies also offer shipping insurance. These insurers often provide more comprehensive coverage for loss, damage, or theft, and may offer lower premiums than the carriers themselves. This is a common consideration for online sellers, which is why many e-commerce business insurance policies bundle shipping coverage with general liability and product coverage.
