Parcel Insurance and Compensation — What Each Carrier Covers

Carrier insurance is one of those things nobody thinks about until they need it — and by then it is often too late to add it. This guide explains what is covered by default at each major carrier, what add-on insurance actually does, and what the exclusions are that catch most people out.

1. Default liability — what every carrier covers without extra charge

Every carrier is legally liable for parcels in their network up to a certain amount, without any additional insurance. This is “statutory liability” — not insurance, just the carrier’s baseline responsibility:

Compensation is calculated from the proven market value at time of dispatch, capped at the stated limit. The carrier pays whichever is lower — the actual loss or the default cap.

2. Declared-value insurance — how it works

“Declared value” allows you to tell the carrier the true value of the shipment and have them accept higher liability for an additional fee:

• You state the item’s value at booking (must be accurate — the carrier will ask for an invoice or receipt if you claim)
• An additional fee is charged — typically 0.5–2% of the declared value, with a minimum of €5–€15
• If the item is lost or damaged beyond repair, the carrier compensates up to the declared value
• Damage compensation is for the repair or replacement cost, not the declared value, unless the item is a total loss

Important: this is not traditional insurance — it is an extension of the carrier’s liability. The carrier is judge and payer simultaneously. For very high-value items, independent parcel insurance from specialist providers gives a cleaner claims process.

3. What is NOT covered — the exclusions that catch people out

These exclusions are standard across virtually every carrier:

Inadequate packaging

If the carrier determines that the packaging was insufficient for the contents, the claim is rejected. “Insufficient” means: fragile items without padding, glass items in single-walled boxes, items that could not survive normal handling and stacking. Each carrier has packaging guidelines — follow them precisely for valuable shipments.

Fragile items without specific packing

Glass, ceramics, screens, and similar items often fall into a special category. Some carriers exclude fragile items entirely from standard insurance unless specific heavy-duty packaging requirements are met (double-boxing, 5 cm foam on all sides, etc.).

Cash and financial instruments

Cash, cheques, money orders, bank cards, gift vouchers — universally excluded. No carrier insures money or money-equivalents.

Jewellery and precious metals

Rings, necklaces, watches, gold, silver — most carriers exclude these entirely from standard declared-value. DHL Express, UPS, and FedEx allow jewellery with prior written authorisation and strict packaging requirements. Without this, a claim for lost jewellery will be settled at the statutory minimum.

Prohibited items

If a shipment contains prohibited items (batteries incorrectly classified, alcohol, controlled substances), any insurance is void regardless of what else was in the parcel. See the prohibited items guide.

Consequential losses

Carriers pay for the value of the item itself, not consequential losses — missed business deadlines, commercial losses from delays, or costs of disruption. Only specialist business insurance covers these.

4. When to use specialist parcel insurance instead

For shipments where the carrier’s declared-value maximum is insufficient or where you need an independent claims process, specialist parcel insurance providers include:

• Shipsurance — US-based, widely used for international shipments, covers up to $150,000 per shipment
• ParcelGuard — EU-focused, works with DHL, UPS, FedEx bookings
• Cover-More / Insureship — handles high-value and fragile items with specific underwriting

Cost is typically 1–3% of the declared value. The key advantage: an independent insurer pays claims faster and without the inherent conflict of interest that exists when the carrier investigates its own loss.

5. How to make a successful insurance claim

The claim process is the same whether using declared-value or independent insurance:

1. Document damage immediately — photograph packaging (all sides) and contents before disposing of anything
2. Note damage on delivery receipt — if visible at door, write it on the slip before signing
3. File within deadlines — 3 working days for damage, 30 days for loss
4. Provide complete documentation — tracking number, photographs, invoice/proof of value, proof of dispatch
5. Keep all packaging until the claim is resolved — carriers may request physical inspection

See the full parcel claim guide for carrier-by-carrier filing instructions.

6. Royal Mail Special Delivery — the exception worth knowing

For UK domestic shipments, Royal Mail Special Delivery Guaranteed is a unique product: it includes up to £2,500 of cover as standard (or £10,000 with an additional premium), guaranteed next-day delivery by 1pm, and a full money-back guarantee if the deadline is missed. For valuable UK domestic shipments, it competes directly with private couriers on both price and protection.

Summary

Default carrier liability is typically €100–€520 — adequate for low-value parcels, insufficient for anything valuable. For items over €200, add declared-value insurance at booking (0.5–2% of the value, minimum €5). Know the exclusions: poorly packed fragile items, cash, jewellery without prior authorisation, and prohibited contents are all uninsured regardless of what you paid. Document everything before sealing. File claims within 3 working days (damage) or 30 days (loss).