In my experience, it’s easy to overlook the nuances between declared value and actual insurance coverage. This distinction becomes particularly important for shippers who rely on carriers such as USPS, FedEx, and UPS. While these carriers offer a declared value option, it’s crucial to understand what this really provides—or rather, what it doesn’t.

Declared Value: A Limited Safety Net

The term ‘declared value’ often gives a false sense of security. Essentially, it pretends to be insurance but falls short. Declared value is merely a cap on what a carrier might pay if a package is lost or damaged, assuming the shipper can prove the carrier’s fault. Shippers contend with a significant burden of proof, and resolving claims can be a tedious process. This makes me question why anyone would leave their goods to chance.

The Advantage of Actual Cargo Insurance

Here’s what surprises many: true cargo insurance doesn’t rely on proving carrier liability. It streamlines the claims process and reduces the burden of evidence. It’s about real financial protection and peace of mind. A formal insurance policy acknowledges the inherent risks in shipping and offers shippers a more reliable safety net.

From my vantage point, shippers would do well to consider the implications of relying solely on declared values. By recognizing the superior protection offered by cargo insurance, they position themselves wisely against potential losses that could otherwise impact their business significantly.

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.