What is Limited Liability Coverage?
Limited liability coverage is the baseline protection that carriers provide for shipments at no extra charge, up to a specified maximum amount. It is not the same as shipping insurance - it is simply the carrier’s stated maximum payout if a package is lost or damaged and the carrier accepts responsibility.
How Limited Liability Works
Carriers such as UPS, FedEx, and USPS generally include a limited amount of coverage (often up to $100 per package) with every shipment. This coverage applies automatically without the need to declare a value. If the shipment’s value exceeds the carrier’s maximum, the shipper is responsible for any remaining loss.
Even when limited liability applies, reimbursement is typically based on:
- The item’s replacement cost
- Its depreciated value
- The actual repair cost
This means that the payout may be significantly less than the retail or replacement price, especially for used, rare, or custom-made items.
Restrictions and Exclusions
Limited liability coverage comes with strict conditions. Carriers may exclude:
- Certain high-value or prohibited items
- Fragile goods not packaged to carrier standards
- Perishables or temperature-sensitive items
- Consequential or indirect losses, such as lost profits
Additionally, carriers often require proof of value, proof of damage, and specific packaging compliance before honoring a claim. Failure to meet these criteria can result in denial of reimbursement.
Why Many Shippers Look Beyond Limited Liability
or businesses and individuals shipping valuable, fragile, or time-sensitive goods, limited liability often falls short. It provides minimal financial recovery, offers no guarantee of full-value reimbursement, and can involve lengthy claims processes.
That’s why many shippers turn to licensed shipping insurance providers like U-PIC Shipping Insurance for:
- Comprehensive coverage that protects against a wider range of risks
- Full-value reimbursement without depreciation deductions
- Streamlined claims handling for faster resolution and payment
- Flexible integration with single- or multi-carrier shipping workflows
With U-PIC, shippers gain peace of mind knowing their shipments are covered beyond the narrow limits of carrier liability, ensuring better protection for both the product and the bottom line.
