Top shipping insurance questions, answered! | FlagShip

Top shipping insurance questions, answered

Posted by Tania

Shipping insurance questions and your business

The reality is shipping insurance is not typically top of mind when preparing a shipment. It’s not critical to most shippers UNTIL a shipment is lost or damaged, then it becomes top priority. Or perhaps someone new to shipping may not even know what shipping insurance is all about and when it’s required. Whatever the case may be for your business, one thing is true; insuring your shipment will give you peace-of-mind and create less hassle for you when unforeseen circumstances may arise.

When a customer’s shipment is damaged or lost, it is not an ideal scenario for anyone – the courier, FlagShip and most importantly our customer.  However sometimes damage or loss happens, and when it does there are many questions that follow.

Our team of experts have pulled together some of the most common shipping insurance questions; hopefully this can help you!

I thought the courier companies provided shipping insurance on all shipments? By default, courier companies provide up to $100 of insurance on every shipment*. However, when shipping items valued higher than $100 you should consider purchasing additional insurance for your shipment.  For example, if your shipment value is $30 and it is damaged, there is $30 insurance. If your shipment value is $500 and damaged, the maximum the courier will reimburse is $100 unless additional insurance was purchased.

To purchase additional shipping insurance, we offer excellent insurance rates for individual small package courier shipments as well as palletized freight. Our rate is $1.25 per $100 of insurance purchased. Learn more about our in-house insurance.

*Shipping insurance does not apply to all items. Click here for a list of products that are not covered under the courier default insurance and / or additional insurance purchased. 

What happens if my shipment is damaged and I didn’t purchase shipping insurance? The maximum the courier will cover by default insurance is $100.

Do I have to contact the courier directly if my shipment is lost or damaged? If you processed your shipment with FlagShip, you call us directly and we will manage everything for you.

What kind of documentation do I need to submit an insurance claim? You will need to provide an invoice showing the cost price of goods before markup. You will be reimbursed cost, not the selling value. Also, photos of damaged item(s)/exterior of box/interior of box to show packaging materials

What is the amount that I am eligible to receive? You are eligible to receive a reimbursement of:

  • The value of the damaged/lost product(s) at your cost price before taxes
  • Shipping costs of the original shipment

Will you reimburse shipping even if the shipment was delivered? If your shipment was delivered damaged, let us know and we can definitely make a claim for the shipping charges with the courier!

How long does the claims process take on average? The claims process can take anywhere between two week to one month to complete. This depends on various factors (ex. if courier was able to inspect the shipment, if requested documentation was submitted, etc).

How will I receive my claim settlement? Once the claim is finalized, we will mail you the settlement cheque.

Do I need to keep the damaged items? Yes, along with original box and packaging materials as the courier may request an inspection before processing the claim.


If you would like to talk to someone about shipping insurance please call us at 1-866-320-8383 or email