Not All Package Protection Is Insurance

At checkout, you’ve probably seen the option to add “shipping protection.” It sounds like insurance—but in most cases, it’s not. In fact, the difference can affect your compliance, your claims experience, and your bottom line.

Here’s what you need to know.

🛡 Shipping Insurance: Licensed, Legal, Reliable

Shipping insurance is a regulated product sold by licensed providers like U-PIC. It covers loss, damage, and shortage with a real insurance policy backed by underwriters.

📜 Fully licensed and compliant in all 50 states and Canada
🧾 Pays out full invoice value (not just pennies on the pound)
💡 Transparent terms, regulated claims timelines
⚖️ Backed by actual legal protections

🚫 Shipping Protection: Risky Territory

Shipping protection is typically an unlicensed service sold as a fee, often by checkout apps or software companies—not insurers.

❌ Not legally insurance
❌ Often added automatically (can trigger lawsuits)
❌ Vague terms, hard-to-enforce claims
⚠️ Can expose sellers to legal risk (esp. in California)

Example: A recent class action (Wolf-Bond v. TA3 Inc.) alleges deceptive use of shipping protection fees that weren't disclosed clearly at checkout.

🧠 Why the Difference Matters

Legal exposure: Selling or offering unlicensed insurance can violate state laws
Reputation risk: Hidden fees and denied claims frustrate customers
Compliance pressure: California has already taken legal action under § 17200 UCL