What Shipping Insurance Doesn't Cover

items not covered by shipping insurance

When packages get lost, damaged, or stolen, customers expect you to make things right. If you insure shipments, making things right is easy and affordable. Simply file a claim, collect a reimbursement, and send the disgruntled buyer a replacement or refund.

But are things always so simple? Unfortunately, no. Many shipping policies exclude certain items from coverage, meaning you can’t rely on insurance 100% of the time. 

This article will provide a basic overview of items or circumstances that aren’t usually covered by shipping insurance. It will also suggest steps to keep your products safe when insurance isn’t part of the equation.

Of course, you’ll find specific restrictions and exclusions in your policy. When in doubt, read the terms and conditions to see what is and isn’t covered. 

Items That Aren’t Properly Packed or Addressed

Most insurance policies won’t reimburse you if products get damaged due to improper packaging. It makes sense—if you cut corners to save time or money on packaging, the insurance provider shouldn’t have to pay the price! Similarly, insurance may not cover package loss due to incorrect addresses. Again, this is something your company is in charge of getting right—it’s not the carrier’s or provider’s responsibility. 

To get the most value out of your policy, use sturdy packaging materials and develop careful packing processes. Use address verification software to catch mistakes and typos before printing shipping labels.

When you can prove you’ve done your due diligence, insurance will gladly cover any damage or loss caused by rough handling or carrier mistakes.


Because they’re more susceptible to theft (and costly to replace), extremely valuable items are sometimes excluded from shipping insurance policies. Other times, coverage is limited to a certain dollar amount. So, what types of valuables might not be covered? The list includes:

  • Fine art
  • Collectibles
  • Cash and coins
  • Jewelry
  • Precious stones

If you ship high-value items, don’t sweat! Sometimes, you can still insure these products by requiring a signature confirmation at delivery. This increases the delivery’s security, ensuring that somebody receives the package in person and vouches for its condition.

If signature confirmation isn’t enough, consider looking into specialized insurance services, such as a provider that focuses on insuring jewelry.


Does your business ship perishable goods like food or pharmaceuticals? If so, traditional shipping insurance might not be your friend. Because perishables have such a high risk of spoiling, they’re often excluded from coverage. It all comes down to the concept of inherent vice: perishables have natural characteristics (inherent vice) that make them susceptible to damage even under normal handling and transport conditions. 

If your business ships food, be aware that although carrier delivery estimations aren’t always accurate, you remain responsible for ensuring that food arrives fresh and unspoiled. By packing boxes with the proper insulation and coolant and using expedited shipping services, you’ll minimize the chances of food going bad.

If you’re shipping pharmaceuticals, explore insurance offerings designed specifically for pharmaceutical shipments.

Dangerous or Restricted Items

Items that are illegal, dangerous, or restricted for transportation may not be covered by shipping insurance. This can include things like explosives, firearms, or hazardous materials. 

Package Theft (Not Covered by Carrier Declared Value Services)

Many major carriers, including USPS, UPS, and FedEx, offer up to $100 of package protection with every shipment. For an additional fee, you can declare a higher value to get more coverage. Many people think of declared value and shipping insurance as the same thing—but they’re not. And if you expect this built-in carrier “shipping insurance” to cover porch piracy, you’ll be sorely disappointed.

While declared value services are an easy and affordable way to protect your shipments, they have a glaring flaw: they don’t cover theft after a package has been delivered. Fortunately, true shipping insurance does cover porch piracy. If someone snags one of your customer’s packages after it’s been dropped off, the insurance provider will cover the cost of a replacement or refund.

If shipping insurance isn’t in the budget but you still want to protect shipments against theft, give shoppers the option to purchase package protection at checkout. One of the easiest ways to do this is to download Norton Shopping Guarantee with Package Protection by EasyPost on the Shopify app store. It doesn’t cost your business anything, and it will bring your customers peace of mind knowing that their products are safe from loss, damage, theft, and then some.

Merchant Issues and Identity Theft

Customers are wary of more than just package loss and damage. When shopping online, they also have to decide whether the merchant is reliable. Will their personal information stay secure? Will the merchant hike up prices, only to lower them a few days later? If the product doesn’t match the description, will they get a refund?

Shipping insurance has a limited scope—it only protects customers from issues that happen during the shipping process. To address other concerns, like the ones mentioned above, you need a shopping guarantee. When paired with shipping insurance, a shopping guarantee helps build buyer trust, increase conversions, and keep every purchase safe. 

Learn How Shipping Insurance Works & How To Choose the Right Kind

Hopefully, this article doesn’t give you the wrong idea about shipping insurance. While it’s important to know what’s not covered, you should also know that most businesses don’t run into issues insuring their goods. 

So now that you know what shipping insurance doesn’t cover, how about learning what it does cover? We’ve assembled some resources to help you decide whether the time is right to make insurance part of your shipping process.

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