Shipping goods is an intrinsic part of day-to-day operations for many businesses. Yet, there’s a subtle distinction that often goes unnoticed: the difference between carrier-provided declared value and actual cargo insurance.

What Shippers Need to Know About Declared Value

One might observe the assurance that USPS, FedEx, and UPS offer with their declared values. However, it’s important to recognize that declared value is not synonymous with insurance. These carriers only cover the reimbursement of declared amounts if the shipment is lost, damaged, or delayed due to their fault.

The Burden of Proof and Liability

If an incident occurs, a shipper must first establish the carrier’s liability. This task often involves time-consuming documentation and proof of fault, which can be burdensome, especially when an episode disrupts operations. One can see how reactive these measures are, mostly taking effect after issues arise.

Real Coverage Means Real Peace of Mind

Cargo insurance, on the other hand, functions quite differently. It typically provides coverage irrespective of the carrier’s liability and involves fewer hoops to jump through. Claims are processed faster, with a lower burden of proof. What this means for a shipper is straightforward: a more efficient and reliable method of managing risks.

While carrier liability might suffice under simple scenarios, it’s the dedicated cargo insurance policy that lends a comprehensive layer of protection. Understanding this difference allows one to better safeguard their shipments and their business.

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.