That is correct, you need to set Padding to the panel in order to move the labels to the inside, hence does not allow them to cover up the panel border.
Should you have any other questions, do not hesitate to open a new thread.
Check out Telerik Analytics, the service which allows developers to discover app usage patterns, analyze user data, log exceptions, solve problems and profile application performance at run time. Watch the videos
and start improving your app based on facts, not hunches.