Understanding Parcel Insurance

Running a business means paying attention to every detail, especially when it comes to shipping. With so many moving parts in your supply chain, one small transit mishap could be costly. This is where parcel insurance comes in as a safety net, ensuring your shipments are protected if something goes wrong.

In this post, we’ll dive into the essentials of parcel insurance — what it covers, how it works, the different types of coverage available and tips on filing a claim. Plus, we’ll explain why Parcel Insurance Plan might just be the solution your business needs.

Related: Navigating the world of international shipping

What is parcel insurance?

Parcel insurance is extra coverage that protects your shipments if they’re lost, damaged or stolen during transit. This is especially important for high-value or fragile items, where replacing or repairing a lost or damaged package could lead to significant costs and erode your bottom line.

PIP provides businesses like yours with affordable parcel insurance that offers comprehensive protection beyond what’s available through major carriers like UPS, FedEx and USPS. Whether you’re shipping domestically or internationally, PIP has you covered.

What does parcel insurance cover?

The type of coverage offered by parcel insurance can vary, but generally, it covers:

Lost or stolen packages: If your shipment goes missing during transit, parcel insurance reimburses you for the declared value of the items.
Damaged goods: In the event that your shipment arrives damaged, the insurance can cover the cost of repair or replacement.
Shipping cost: Some policies may even cover the cost of shipping and handling in addition to the value of the items shipped.

With PIP, your packages are protected whether you’re sending them across the country or around the world. We also cover a variety of items that other insurance companies may exclude, such as electronics, cell phones and jewelry. However, there are exclusions, which we’ll detail below. It’s always a good idea to check the details of your coverage.

Different types of parcel insurance

When it comes to insuring your shipments, there are two main types of parcel insurance to consider: carrier-provided insurance and third-party insurance.

Carrier-provided insurance: The carrier typically includes this type of insurance up to a certain value (often around $100). It only reimburses you for the deprecated value of goods, and the claims process can be sometimes lengthy and complicated.
Third-party insurance: This insurance provides a more comprehensive level of coverage and often comes with better customer service. PIP offers full reimbursement for the declared value of your shipment and has a faster, simpler claims process. Plus, you can avoid the hassle of proving the carrier was at fault for the loss or damage.

Why choose Parcel Insurance Plan?

Parcel Insurance Plan has been providing third-party shipping insurance for over 50 years, offering tailored coverage for businesses that ship high-value parcels regularly. Here’s why PIP might be the best choice for your business:

Save money: PIP’s rates are often lower than those of carrier-provided insurance. Whether you’re shipping via USPS, UPS or FedEx, PIP can help save you money with competitive pricing for frequent shippers.
Save time: PIP simplifies the claims process, paying out claims within 7-10 business days, so you can focus on running your business instead of getting tangled up in paperwork.
Great coverage: PIP insures both domestic and international shipments, with no country restrictions except Russia, ensuring your business is protected wherever you ship.

Related: Why Shipping Insurance Can Be Your Competitive Advantage

Filing a claim with PIP

Filing a claim may seem complicated, but PIP simplifies the process. Here’s a quick guide to help you navigate it:

File a claim with the carrier: If you’re shipping with UPS, FedEx or another carrier, your first step is to file a claim with the carrier. This step is important to establish liability for the loss or damage.
Submit your documents to PIP: Once you’ve received the carrier’s confirmation of the loss or damage, submit your claim to PIP with the required documentation (e.g. a completed claim form, proof of the carrier’s payout and any supporting documents like your daily manifest report).
Quick resolution: PIP processes your claim within 7-10 business days, ensuring your business isn’t left in limbo.

However, it’s important to note that filing claims for USPS packages works a little differently. If a package is lost, PIP requires you to wait 30 days before filing a claim. Here’s the process:

Wait 30 days: For lost packages, claims can only be filed after 30 days from the shipment date. This is a USPS-specific rule.
Submit documentation: When filing the claim with PIP, you’ll need a statement from the consignee confirming non-receipt or damage, along with your shipping invoice and other standard documentation.
Fast claim processing: Once the claim is submitted, PIP will process it quickly, typically within 7-10 business days, ensuring minimal disruptions to your business operations.

Common exclusions and limitations

Not all shipments are eligible for coverage, and it’s essential to know the exclusions and limitations of your parcel insurance policy. At PIP, we cover a wide range of goods but do exclude certain items, such as:

Coins, bullion, loose diamonds and stones
Stocks, bonds, currency and deeds
Evidence of debt, travelers checks and money orders
Gift certificates, calling cards and lottery tickets
Negotiable documents
TVs over 25 inches (measured diagonally)

Make sure to familiarize yourself with these exclusions to avoid surprises when filing a claim.

Is parcel insurance worth it?

For businesses shipping high-value items or fragile products, parcel insurance is a smart investment. Even with the best packaging and the most reliable carriers, accidents can happen. Without insurance, you risk losing the value of your goods — and potentially the trust of your customers.

Choosing a dependable partner like PIP can ensure that when things go wrong, you have the protection you need to keep your business moving forward. Plus, with our fast claims process and flexible coverage options, you can have peace of mind knowing that PIP has your back.

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