When it comes to shipping insurance, if is often misunderstood as to the benefits of the carriers provided coverage. When you declare a value with UPS and FedEx, you are not purchasing insurance; you are purchasing declared value coverage.  Below is a list of differences.

Declared Value

• Declared value coverage is not insurance for shippers.
• Shipper must prove that the carrier was negligent.
• Does not increase a carrier’s scope of liability, but simply allows a shipper to pursue a higher recovery.
• Does not cover losses occurring outside control of the carrier.
  • Common exclusions and warranties may include “dishonesty on part of carrier’s employees” or “theft occurring while vehicle is left unattended”.
• Shipments are not covered “door-to-door”.
  • Limits liability to the time in which the goods are in the care, custody and control of the carrier’s actions or failure to act that are not excluded by the provisions of the Bill of Lading and tariff.
• Claims handling is specified in the carrier’s Bill of Lading and tariffs.

Insurance

• Provides ALL-RISK* coverage while shipments are in transit.
• Pays regardless if the loss or damage was due to the carrier’s negligence.
• The insurance company, for a premium, agrees to indemnify the shipper against loss from perils expressly stated in the policy.
• The insured is covered for listed perils and must show that a loss occurred and was a listed peril.
• Is regulated by each state’s department of insurance.

* Most full scope coverage is All-Risk. Other insurers may offer FPA (total loss) coverage.