Why Declared Value Isn’t Enough for Shippers

In the landscape of logistics, shippers often depend on declared value options offered by major carriers like USPS, FedEx, and UPS, assuming it provides comprehensive coverage for their goods. It’s a common misstep that reveals itself in the nuanced difference between declared value and genuine cargo insurance.

Declared value, contrary to common belief, doesn’t equate to insurance. Instead, it’s merely a liability limit, hinging on proving the carrier’s fault in cases of loss or damage. This requirement can translate into elongated claims processes, as proving negligence isn’t always straightforward.

Real Insurance Versus Illusions

Opting for true cargo insurance shifts the dynamic significantly. It bypasses the hurdles of proving carrier fault. The burden of proof is notably reduced, aligning more closely with shipper interests. Claims are settled more swiftly and with less contention, offering peace of mind for every shipment sent.

Understanding these distinctions reshapes how shippers can strategically manage risk. It is not merely about transferring risks but appropriately managing them to align with operational priorities and financial stewardship.

In my experience, evaluating and selecting comprehensive coverage uniquely positions shippers to safeguard their interests, minimizing disruptions and potential losses. It remains a choice of foresight over assumption.

Andria Baunee is the principal broker at National Heritage Risk – a boutique insurance brokerage that caters exclusively to medium-sized fleets in the United States. For more information, email Andria@NationalHeritageRisk.com or call (716) 402-8686.