The Ultimate Shipping Insurance FAQ Guide

According to Security.org’s 2022 Package Theft Annual Report, porch pirates stole from 49 million Americans over the past year. No matter how reliable a shipping service may be, unexpected circumstances or accidents can always occur. That’s why insuring your orders is so important. Parcel insurance is your last line of defense if your package is lost, damaged, or stolen, but when dealing with high-mix, high-volume shipping, insurance can become difficult to manage - especially if your company uses multiple carriers. Different carriers, both large and small, offer per-package insurance or automatic insurance with packages valued under $50. Generally speaking, insurance through carriers doesn’t cover everything though, so it is the companies' responsibility to make sure they have coverage for the unexpected.  

Whether you are new to e-commerce delivery or are a seasoned veteran, it is no secret that package theft, lost packages, and damaged items can be quite problematic. That’s why DesktopShipper is now offering Insurance powered by Parcel Protection, as an optional service to ensure full care and protection at a low price.  Through DesktopShipper’s new ShipV2 experience, shippers can now add insurance directly to the label when creating it. After reviewing the label, add together the cost of insurance to the total value, then download and print the label to complete the order. Sounds easy, right? Here is everything you need to know to get started: 

How Much Does Insurance Cost?

With an average cost of $1 per $100 unit price, Parcel Protection provides DesktopShipper users with the ability to insure their orders and navigate claims easily, without having to utilize multiple software programs. When electing coverage, you can insure the package for the price you’ve invoiced to your customer for the goods sold, plus the amount paid in postage to ship the package. Did you know the carriers will only pay the repair cost, replacement cost, or manufacturing costs, whichever is the lesser? With Parcel Protection, if it can’t be repaired, the full value is covered!

When Do I Need to Add Insurance?

Every business has its own unique needs and risk tolerance. You can insure all your packages or pick and choose based on your needs. A damaged or lost package can adversely affect your bottom line, so it is usually a smart idea to add insurance to most orders when shipping them. However, ensuring that more valuable goods are protected in case of damage or loss, is extremely important.

What are the Requirements?

In order to begin using Insurance powered by Parcel Protection, your DesktopShipper account needs to be updated to ShipV2 cloud-based UI. Additionally, all packages must meet or exceed the industry-recognized carrier packaging standards. If your packaging is deemed insufficient, any resulting claim may be subject to denial. Along with restricted items and packages that require a signature upon delivery, there are also several package requirements that apply when adding Parcel Protection insurance via DesktopShipper. Please refer to the terms and conditions, which can be read, here. 

Are There Restrictions?

Below is a representative list of excluded items we typically do not insure:

Accounts, bills, bullion, currency, cash in transit, evidence of debt, checks, money orders, cash on delivery (COD) payments, loose stones, original fine art, coins (collectible coins are not excluded), securities and other negotiable papers, tickets, deeds, notes, manuscripts, documents, neon items, hazardous material (per UPS Hazardous Materials List), LCD monitors or screens, televisions (including LCD, plasma, projection, and similar), perishable cargo or similar property, unless specifically endorsed in writing to this coverage.

Unfortunately, any descriptive labeling or packaging that would draw attention to your product would not be covered, regardless of commodity. We want your packages to blend in and create anonymity as to their contents. Having any descriptive words will exponentially increase the risk of loss or damage, so we advise you to stay away from them. You can provide a description of the goods if required on the customs declaration form.

If you ship internationally, we have a small list of excluded countries in which we don’t offer shipping insurance coverage. Below is a representative list of excluded countries:

Afghanistan, Angola, Belarus, Bolivia, Bosnia, Burma (Myanmar), Congo, Cuba, Iran, Iraq, Ivory Coast (Cote d'Ivoire), Jordan, Liberia, Nigeria, North Korea, Paraguay, Russia, Sierra Leone, Somalia, Sudan, Syria, Ukraine, Zimbabwe. Also, any location that would be in violation of any U.S. economic or trade sanctions including OFAC Restricted Countries.

What kind of Claim Coverage is offered?

Each insurance company has a different set of rules related to insurance coverage and what is or isn’t a situation that will lead to a successfully paid claim. Below are some major coverage areas that exist with other providers and are inadequate:

Forcing a Carrier Tracer: If a claim occurs, whether it is lost, damaged, or shortage of contents, most insurance companies require the Shipper to submit a tracer with the carrier. This is an unnecessary step to require of your customers. With the other guys, if there is no tracer, there is no claim - when submitting the claim to the insurance company, you are required to provide a copy of the carrier tracer for a claim to be considered. With The Parcel Protection Advantage, the entire process is intended to be with our company. No additional work is asked of the Shipper to communicate with the carrier.

Stolen Packages: A package gets “delivered,” but the customer cannot locate it. The quick response from the customer is “someone stole my package.” With the other guys, customers are always required to complete a statement regarding their package, and if they use any language that insinuates it was stolen, the claim will be declined as theft is not covered. In fact, most policies will only protect the customer while the package is in transit, which means once it has been delivered, all bets are off. This will usually result in the insurance company advising the customer to submit a homeowner claim or submit a police report. One of the single most significant differences between our Insurance powered by Parcel Protection and everyone else is that if the claim is submitted within 90 days, we cover theft. This goes back to our notion that if it’s insured, but the customer doesn’t receive it, we protect the Shipper knowing they have exposure to these events. 

Deductibles & Insurance Limits: Make the customer jump through hoops and ultimately get denied anyway. Many programs try to build their model with a $100 deductible in place. This is intentional by the insurance companies, as this would require the customer to submit a claim with UPS/FedEx for the first $100 and any remaining amount to the insurance company. However, submitting a claim and getting paid by the carrier is a tedious and exhaustive process. These insurance companies know this and rely on UPS/FedEx to take their time or deny the claim. If UPS/FedEx denies a claim for the first $100, the insurance company will not pay a penny for their responsibility. The Parcel Protection Advantage means all of our partnerships are crafted to remove the carrier from the equation. Meaning that customers will never have to submit a claim to anyone other than us. We don’t impose contingencies on paying claims either; it’s all full coverage based on the amount they insure. 

Looking to get started, but not currently using ShipV2? Talk to a DesktopShipper Rep today!