Shipping insurance for high-value electronics and tech

Published on
Aug 21, 2023
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The United States is one of the biggest markets in the world for electronics, and it faces unique challenges. Products often have a short shelf-life as consumers move on to the next big thing. Shippers need to get their product from point A to point B quickly, but carefully. Finding the right shipping mode and carrier are key, but you’ll also want shipping insurance for electronics.

High-value electronics are particularly vulnerable during transit due to their fragile nature and expensive price tags, which makes them a target for theft and damage. Shipping insurance for high-value electronics can help protect against the financial loss associated with these risks, providing peace of mind for both the shipper and the recipient.

Freight insurance vs. shipping insurance for electronics

There are many different types of insurance available for shipping electronics. Shipping insurance is the standard insurance that a person or small business buys for small, individual shipments through a company like USPS, FedEx, or UPS.

Freight insurance covers larger amounts of goods, for example several pallets of electronics up to a full truckload (FTL) or more. Typically, the shipper is the one who purchases freight insurance since they usually have the largest financial investment and the carrier usually provides up to $100K in insurance.

There’s also cargo insurance, which is mainly used for ocean shipments, but can also cover “inland” shipments, or those that travel by rail or road. Carriers typically buy cargo insurance to protect themselves from liability.

What’s covered

There are different types of shipping insurance for electronics that may cover different things. Even within the same type of insurance, your individual policy can vary. The events that are typically covered include:

  • Abandonment
  • Acts of war
  • Customs rejection
  • Natural disasters
  • Vehicle collisions
  • Weather-related incidents

What’s not covered

Like what’s covered, what isn’t covered can also vary by which type of insurance for freight you choose and your specific policy. For shippers, it usually doesn’t cover damage caused by something they are responsible for, including:

  • Poor packaging
  • Product flaws that contribute to the damage
  • Hazardous products
  • Certain modes of transportation

In addition to hazardous products, some policies may not cover certain types of electronics. That means electronics shippers need to read their policy especially carefully. They should also ensure they properly package and secure their freight. Check out our guide to shipping electronics to learn how.

Types of shipping insurance for electronics

Freight insurance isn’t just categorized by shipment volume and product. There are also different types depending on how often you ship.

Open coverage

If you ship frequently, you’ll want open coverage, which covers multiple shipments made over a certain period of time. You’ll need to provide business information like what you ship, how much, and how often so the insurer can determine your premium. You pay your policy premium, then report your shipments to the insurer on a regular basis. Policies typically last a year and cover unlimited shipments during that time. Then, you can review and renew your policy.

Single coverage

If you don’t ship frequently or ship low volumes, you’ll want single coverage, which insures only one shipment. You’ll determine the value of your shipment, obtain a one-time policy for it, and pay the premium. It doesn’t renew, so you’ll need to open a new policy for your next shipment.

Benefits of shipping insurance for electronics

Any reputable carrier you work with will have its own liability insurance. This type of insurance covers damage that’s directly caused by the carrier, but may not cover the entire cost of replacing the goods. It’s designed to protect the carrier, not the shipper.

That’s why many shippers buy additional insurance for freight—especially electronics. Electronics tend to be fragile, but also high-value and prone to loss and theft. While you may pay more for shipping insurance for electronics, it’s worth it because it:

  • Covers more of the damage caused by the carrier’s negligence than the carrier’s liability insurance may cover, and also covers damage caused by “acts of God” like weather or traffic accidents.
  • Covers theft of your goods, which is especially important for items like electronics, which are not only valuable, but often travel through many different ports, trucks, and hands on their journey to the customer.
  • Minimizes your financial loss by protecting your cash flow and your profits. It can also streamline the process of reporting losses.

Where to buy insurance for electronics freight

You can buy shipping insurance for electronics directly from an agent, or through a freight broker or forwarder. Here’s how it works:

  • Insurance companies have agents who will work with you directly to quote and service your policy. They can help you find the best policy and make a claim if needed.
  • Freight brokers have valuable relationships with national carriers and insurance companies. If you already work with a broker, they can connect you with an insurance company.
  • Freight forwarders also have relationships with insurance companies and often offer their own insurance packages. If you work with a freight forwarder, ask them about their options.

How Shared Truckload secures your electronics

Shipping insurance for electronics is especially important because these products are valuable and prone to damage and theft. But the ultimate goal of any shipper is to get products to their destination on-time and damage-free—and choosing the right shipping mode is just as essential as insurance.

Full truckload (TL) is commonly known as the safest mode, but many electronics shippers don’t have enough goods to fill a truck. They turn to less-than-truckload (LTL), but this mode also has its drawbacks, including high damage claims and poor on-time delivery percentages. There’s another option: Shared Truckload (STL).

Flock Freight’s FlockDirect® service provides guaranteed load-to-ride shipping, enabling shippers to move their freight faster and more efficiently while minimizing damage. With FlockDirect®, even small shipments receive truckload-style service at a reduced cost. Shippers have full control over pickup and delivery dates and avoid hidden LTL accessorial fees.

Although FlockDirect® uses various modes of transportation, Shared truckload (STL) is the most effective. The shared truckload model enables businesses to share trailer space in a multi-stop full truckload and pay only for the space they need, offering low LTL rates and full truckload service.

Shared Truckloads combine freight going to the same destination, eliminating the hub-and-spoke model and reducing costly pallet damage, delays, and loss. It also reduces the need for freight insurance claims, particularly for electronics.

Shared Truckload has many benefits for your business. While this concludes our guide, you can learn more about Shared Truckload for retail and electronics, or sign up to experience FlockDirect® Shared Truckload for yourself!