Are items that are in a courier’s network for a long period, but fail to be delivered, deemed as lost?

After 5 days "pending" and 5 days in audit, we confirm your parcel as lost.

Yes, the items would automatically be deemed as "pending" lost after 5 days and "confirmed" lost after a further 5-day audit period during which we monitor whether any further data on the location of the item arises - at this point in time the insurance would payout for the full loss as per the coverage level paid for.