Shipping insurance in India comes in two forms: carrier's risk, where the courier carries the loss for a fee (FOV or risk surcharge) charged as a percentage of declared value, and owner's risk, where you buy transit insurance from a general insurer. Without either, couriers pay only a capped amount, so high-value orders need cover.
What is the difference between owner's risk and carrier's risk?
Every courier booking falls into one of two buckets, whether or not you chose one. Blue Dart's conditions of carriage say shipments travel at owner's risk by default. DTDC's terms make you pick: declare a value and pay a risk surcharge as "carrier's risk", or declare your own insurance as "owner's risk". Pick neither and you get the automatic liability, which DTDC sets at a few hundred rupees per consignment.
| What changes | No cover declared | Carrier's risk | Owner's risk |
|---|---|---|---|
| Who bears the loss | Mostly you | The courier, up to the declared value | Your insurer, up to the insured value |
| What you pay | Nothing extra | FOV or risk surcharge, a % of declared value | Insurance premium, plus a small courier charge on some services |
| Typical cap | Blue Dart: ₹5,000 or actual loss; DTDC: ₹100–₹500 | DTDC: declared value up to ₹2 lakh | Your policy's sum insured and terms |
| How you claim | Courier claim desk | Courier claim desk | Insurer, with the courier's loss or damage certificate |
| Watch out for | Payout far below the product value | Fragile items may be excluded | Policy exclusions such as poor packing |
What is FOV and how much does it cost?
FOV (freight on value) is the courier's charge for taking on carrier's risk. Some couriers call it a risk surcharge, some an insurance or secure-shipment fee. It is usually the higher of a minimum amount or a percentage of declared value, and it is one of the line items sellers often miss when comparing rate cards, along with the other hidden courier charges.
DTDC's published chart charges 2% for carrier's risk up to ₹1 lakh and 1% between ₹1 lakh and ₹2 lakh, against 0.2% (minimum ₹25) for owner's risk up to ₹50,000. Delhivery's Protect add-on covers B2C loss and damage within its network for 0.25% to 0.60% of invoice value, capped at ₹30,000 per shipment. Delhivery states plainly that Protect is not an insurance product, and it asks for at least 60 days and 30 orders of shipping history before you qualify. Blue Dart can arrange insurance on the declared value, with the premium and its service charge billed as FOV. Rates in aggregator and contract rate cards vary, so ask for the FOV line in writing.
Why declared value must match the invoice
Declare the GST invoice value, not a rounder or smaller number. DTDC's terms require the declared value to be no more than the value of the goods, and under carrier's risk its liability is limited to the declared value. Under-declare a ₹40,000 laptop at ₹10,000 to save on FOV and ₹10,000 is the most you can recover. Over-declare and the claims desk will check your invoice.
How does third-party transit insurance work?
For owner's risk, sellers usually buy a marine cargo policy from a general insurer. The name is misleading: these policies cover domestic road, rail and air transit too. A specific transit policy covers one consignment. An open policy typically runs for a year up to a sum insured, with every dispatch declared to the insurer periodically, which suits regular shippers.
SBI General's open-policy prospectus is a useful reference. It lists three levels of inland cover: all risks (Inland Transit Clause A), basic cover (clause B) and fire and lightning only (clause C). It also says transit by courier is not covered on a standalone basis, only together with rail, road, air or sea cover, so confirm with your insurer or broker that parcel shipments are included. Its exclusions include insufficient or defective packing, inherent vice and loss caused by delay.
When a parcel insured under owner's risk is lost, the courier issues a document your insurer needs. DTDC calls it a Certificate of Facts; Blue Dart issues a loss, damage or shortage certificate.
Is shipping insurance worth it? The expected-loss maths
Insurance priced fairly is a slightly losing bet on average; the insurer has costs and a margin. You buy it to cap the damage from a loss you cannot absorb. The table shows the break-even under stated assumptions: premium at 0.5% of order value with a ₹25 minimum, ₹500 recovered from default courier liability, and a 0.5% loss-and-damage rate. Swap in your own rate card and your own loss rate by lane.
| Order value | Uncovered exposure | Premium (0.5%, min ₹25) | Expected loss per order at 0.5% | Break-even loss rate |
|---|---|---|---|---|
| ₹800 | ₹300 | ₹25 | ₹1.50 | 8.3% |
| ₹3,000 | ₹2,500 | ₹25 | ₹12.50 | 1.0% |
| ₹15,000 | ₹14,500 | ₹75 | ₹72.50 | 0.52% |
| ₹60,000 | ₹59,500 | ₹300 | ₹297.50 | 0.50% |
Read it row by row. On an ₹800 order the minimum premium only pays off if more than 8% of parcels go missing, so skip it. At ₹3,000 you need a loss rate above 1%. From ₹15,000 up, premium and expected loss are nearly equal, and the case for cover becomes about variance: if your net margin is 10%, one uninsured ₹60,000 loss wipes out the profit on roughly ten such orders. Run your own numbers in the profit margin calculator.
When is shipping insurance worth paying for?
- High-value electronics. Phones, laptops and cameras are expensive and easy to resell, which attracts pilferage. See our notes on shipping electronics.
- Fine jewellery. Blue Dart's standard conditions list precious metals and stones among items it carries only under a written agreement, so gold and gemstone pieces need a specialist service and their own cover. Check with each courier before booking.
- Fragile goods. DTDC excludes glassware, TV sets and similar items from carrier's risk, so breakables need an owner's-risk policy, plus packaging that survives a sorter.
- Single orders you could not absorb. A ₹1.5 lakh B2B consignment for a small brand deserves cover whatever the loss rate.
It is usually not worth it for low-value orders below ₹1,000, where default liability covers much of the exposure, or for high-volume catalogues where setting aside a self-insurance reserve costs less than premiums. Check how each of your courier partners prices FOV on your lanes before deciding.
How do you claim on shipping insurance?
- 1Notify immediately. Blue Dart's terms ask for loss or damage to be reported straight away, and most insurers require prompt intimation.
- 2Get the courier's certificate: a Certificate of Facts or loss/damage certificate confirming what happened to the AWB.
- 3Keep the damaged item and packaging until the insurer's surveyor has inspected them, if a survey is needed.
- 4Submit the claim form with the GST invoice, AWB, tracking history, packing photos and the customer's unboxing photos or video.
- 5Expect a surveyor's assessment. Blue Dart's terms say claims under insurance it arranges are settled on the insurer's surveyor assessment, which binds the shipper.
- 6Escalate if needed. SBI General's prospectus, for example, lists the insurer's grievance officer, then IRDAI's Bima Bharosa portal, then the Insurance Ombudsman.
If you are claiming against the courier rather than an insurer, follow our lost or damaged shipment claim guide. This article is general information, not legal or insurance advice; policy wordings decide what is covered.
Frequently asked questions
No general rule makes it mandatory for domestic parcels. If you ship without declaring value or buying cover, the courier's default liability applies, which is small: Blue Dart limits uninsured shipments to the lower of ₹5,000 or the actual loss, and DTDC's automatic liability is a few hundred rupees. Some couriers do insist on declared value and cover for certain services, such as DTDC's Secure Pack for valuables.
FOV stands for freight on value. It is the charge a courier adds for carrying the risk of loss or damage, calculated as a percentage of the declared value, usually with a minimum amount. Blue Dart bills the premium and its service charge as FOV when it arranges insurance. DTDC calls its version a risk surcharge and publishes 2% for carrier's risk up to ₹1 lakh.
Generally no. Blue Dart's terms say the insurance it arranges does not cover loss caused by delays, and SBI General's marine cargo prospectus lists loss proximately caused by delay as an exclusion. Couriers also limit their own delay liability; DTDC's terms cap it at the basic freight. For late parcels, focus on customer communication rather than insurance.
Usually not. Insufficient or unsuitable packing is a standard exclusion in marine cargo policies, and couriers put packing responsibility on the shipper. Blue Dart's terms say packing is the shipper's responsibility, and DTDC says it is not liable for damage caused by improper packing. Packing videos and photos help prove the box was fit for transit.
Sources
Shipping operators and engineers who build RouteOneX's courier integrations, NDR and COD workflows for Indian D2C sellers. Every guide is reviewed against courier terms and official sources before publishing, and dated when it is updated.
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