High DOA rates don’t just damage products, they increase insurance exposure, liability risks and claim disputes. Faes helps reduce these risks with professional packaging, clear documentation and DOA-preventive transport solutions.
Summary of this article
When you send goods, you want them to arrive at their destination in perfect condition. But sometimes things go wrong and products arrive broken, damaged or faulty. We call this “Dead On Arrival” (DOA). For companies in the high-tech, medical and defence sectors, this can have significant financial consequences.
High DOA rates not only entail direct costs, but also complex insurance and liability issues. You need to know who is responsible, what risks you face and how you can protect yourself.
Dead On Arrival (DOA) means that a product arrives at its final destination defective, damaged or non-functional, despite having been dispatched in perfect condition. This can range from visible physical damage to hidden defects that are only discovered upon use.
In logistics, DOA is used to describe various types of problems upon arrival. You are dealing with DOA when electronic components stop working due to vibrations during transport, medical equipment is damaged by temperature fluctuations, or precision parts are deformed due to inadequate packaging.
DOA incidents often arise from insufficient protection against external factors such as shocks, moisture, temperature fluctuations or electrostatic discharge. For sensitive high-tech products, even minimal exposure to these factors can be fatal to functionality.
High DOA rates significantly increase your insurance premiums and can lead to exclusions from cover, as insurers will regard your business as high-risk. You also run the risk of claims being rejected due to insufficient preventive measures.
Insurers analyse your DOA history to assess future risks. If you regularly file claims for damaged goods, your profile will be assessed as higher risk. This results in higher premiums or even a refusal of cover for certain product categories.
You also run the risk of reputational damage with insurers. A pattern of high DOA rates can lead insurers to impose stricter conditions on your packaging and transport procedures. In extreme cases, they may require you to adhere to specific packaging standards or use certain carriers.
Liability for DOA depends on the transport terms, the responsibility for packaging and the point at which the damage occurred. Usually, the responsibility lies with the party that packaged the goods inadequately or with the carrier that acted negligently.
When transport is under your own responsibility (such as under EXW delivery terms), you, as the sender, are liable for adequate packaging. If the product arrives DOA due to insufficient protection, you cannot seek recourse from the carrier. However, the buyer may hold you liable for defective packaging.
When you deliver on a CIF or DDP basis, you are responsible for the product until it reaches its destination. DOA resulting from transport damage is then at your risk, unless you can prove that the carrier acted negligently. Documentation of the condition of the packaging and transport conditions then becomes crucial in determining liability.
Liability discussions around DOA often become difficult when it is unclear whether the damage was caused by the carrier, the sender, the packaging method or the handling process. At Faes, we help customers reduce that grey area by making packaging choices explicit and technically defensible. Instead of selecting a case or crate as a standard transport item, we define what the product needs to survive: how it should be supported, fixed, protected against impact, sealed against environmental influences and handled during transport or storage.
This is especially important for high-value, sensitive or mission-critical equipment. When the packaging concept is engineered around the actual risk profile of the product, it becomes easier to prevent damage and easier to demonstrate that the sender took appropriate measures. In that sense, packaging is not only a protective layer around the product; it is also part of the risk file behind the shipment.
Cargo insurance policies usually only cover DOA damage if you can demonstrate that the product was correctly packaged and that the damage occurred during transport due to external factors beyond your control. Insurers often require proof of adequate packaging standards and transport protocols.
Most policies offer ‘all risks’ cover, but exclude damage caused by inadequate packaging or normal wear and tear. For DOA claims, you must therefore provide detailed documentation of your packaging process, transport conditions and the condition of the product at the time of dispatch.
Insurers may require forensic investigation to determine the cause of DOA. They want to know whether the damage actually occurred during transport or was already present at the time of dispatch. For high-value products, they often require pre-shipment inspection reports and specialised packaging protocols as a condition of cover.
Insufficient packaging material, inadequate shock absorption and exposure to extreme temperatures or moisture are the main causes of increased DOA rates. Long transit times and multiple handling points also significantly increase the risk.
Sensitive electronic components are particularly vulnerable to electrostatic discharge and vibrations. Without anti-static packaging and adequate vibration damping, these products can be irreparably damaged during normal transport. Medical equipment often has strict temperature and humidity requirements; exceeding these can lead to DOA.
Your liability risk also increases due to unclear contractual agreements regarding packaging responsibilities. When it is unclear who is responsible for which aspect of the packaging, disputes arise in the event of DOA incidents. International shipments entail additional risks due to longer transit times and varying climatic conditions.
Invest in professional packaging solutions specifically designed for your product type and transport conditions. Document your packaging processes thoroughly and collaborate with specialist packaging partners who have experience with your sector and products.
Develop standardised packaging protocols that comply with international standards, such as UN, NEN or MIL-STD standards. Train your staff in correct packaging techniques and carry out regular quality checks. This demonstrates to insurers that you are proactively managing risks.
Consider packaging management services that take end-to-end responsibility for your packaging solutions. Professional partners can help develop circular, reusable packaging that not only reduces DOA risks but also supports sustainability goals. They possess the expertise to solve complex transport challenges and can often negotiate better insurance terms thanks to their proven track record.
Document your packaging process with photos, videos, and detailed checklists that show compliance with industry standards. Keep records of packaging materials used, staff training certificates, and any third-party packaging certifications. Pre-shipment inspection reports and packaging test results can also strengthen your claim by demonstrating due diligence.
Marine cargo insurance typically offers broader 'all risks' coverage that includes DOA incidents during sea transport, while general freight insurance often has more specific exclusions. Marine policies usually require higher documentation standards but provide better protection for high-value shipments. Always review policy exclusions carefully, as some insurers may limit DOA coverage for certain product categories.
EXW terms shift transport risk to the buyer, reducing your DOA liability, but may hurt customer relationships and limit your control over packaging standards. DDP gives you full control over the shipping process but increases your liability exposure. Consider CIP terms as a middle ground where you control packaging and initial transport while transferring risk at a defined point.
Establish a systematic DOA reporting system that tracks incident rates by product type, packaging method, and transport route. Use this data to identify patterns and implement targeted improvements. Share quarterly DOA reports with your insurer to demonstrate proactive risk management, which can lead to better premium rates and coverage terms.
Follow MIL-STD packaging standards for defense applications, IEC standards for electronics, and ISTA testing protocols for general high-tech products. Use anti-static packaging for sensitive electronics, implement shock and vibration protection based on fragility testing, and maintain strict environmental controls. Consider UN packaging standards for hazardous materials and ensure compliance with destination country requirements.
Establish clear DOA procedures in your sales contracts that define inspection timeframes, documentation requirements, and dispute resolution processes. Implement neutral third-party inspection services for high-value shipments and maintain detailed shipping documentation. Consider DOA insurance or extended warranty options that can resolve disputes quickly while protecting customer relationships.
Thijs Canjels is Business Innovation Manager at Faes and specializes in packaging management and supply chain optimization. In his blogs, he shares insights on efficiency improvements, cost savings and the strategic role of packaging in modern supply chains.
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