How To Protect Yourself and Your Business With Commercial Truck Insurance

Strong Tie Insurance November 2, 2020 Commercial Truck Insurance

While owning a trucking company or working as an independent operator can be a highly successful venture, it is not without significant risks. Therefore, Ensuring you have adequate yet affordable commercial trucking insurance is vital for your protection. 

Moreover, according to the US Department of Transportation (USDOT), in 2017 alone, over 145,000 people were injured in large truck accidents.

Unfortunately, nuclear verdicts, also commonly known as judgments against trucking companies that exceed $10 million, are on the rise. These large verdicts have impacted the trucking industry, causing several motor carriers to close. 

What the American Transportation Research Institute defined as the watershed moment came in 2011 when $40 million was awarded to victims of a truck crash. Three years later, $90 million was awarded to surviving members of a family. The latter case involved a car that lost control in inclement weather conditions and veered into an oncoming truck’s path, resulting in a head-on collision.

Fortunately, there are steps you can take to protect yourself and your business. One of the most important is ensuring you carry the right type of affordable commercial trucking insurance. Let’s take a look at the options and what you need, and don’t need, to operate confidently. 

What Kind of Insurance Does a Trucking Company Need?

This is one of the most important questions a commercial trucking company or owner-operator can ask. The answer lies in the nature of your business and several factors relevant to vehicles, cargo, and transportation methods. 

Liability Insurance

This mandatory truck insurance covers damage that your trucks may cause other people and their property. General liability protects you should one of your drivers get into a crash that causes bodily or property damage to a third-party.

In order to obtain your interstate operating authority (MC number) and USDOT numbers, you must provide proof of liability coverage.

The minimum limits of coverage are dependent upon the type of freight. Non-hazardous freight is categorized into commercial vehicles over 10,000 pounds and requires a minimum limit of $750,000. Many shippers, however, will require a limited liability of at least $1 million. 

This type of insurance also covers damage that occurs at someone else’s property, such as your shipper’s loading dock.

Motor Truck Cargo Insurance

As the name implies, this type of insurance covers the precious cargo you or your drivers are hauling. While not required by the Federal Motor Carrier Safety Administration (FMCSA), most shippers will not work with a trucking company that does not carry cargo insurance.

The typical minimum coverage is $100,000, but this number changes depending on the shipper and the type of cargo.

Physical Damage Insurance

If you finance your trucks, this type of insurance is required. It protects your tractor-trailer when damage occurs, whether from an accident, weather, vandalism, or theft.

There are several types of coverage including collision and comprehensive. It also covers replacement should the truck be damaged beyond repair. 

Bobtail Insurance

This insurance is particularly important for owner-operators that take their big rigs home. This type of liability insurance protects a driver when they are driving a truck without a trailer.

Even when driving under the authority and dispatched, you are only covered by liability when hauling a trailer. 

There are certain situations where this type of insurance is not needed. This includes drivers that always have a trailer, or if you have primary liability insurance and operate under your own authority.

Bobtail trucking insurance does not protect your truck but covers third-party damages. Scenarios, where this might be put into use, include accidents that occur when heading home at the end of the day or heading out to pick up your first load at the beginning of the day.

Non-Trucking Liability Insurance

Non-trucking liability insurance covers your truck when you are using it for personal use and is recommended for those that use their truck for non-business purposes. It will pay for bodily injury or property damage in the event of an accident and is required by many motor carriers. 

Non-trucking liability does not cover your truck when you are on company time, even if driving with an empty trailer. 

Unladen Liability Insurance

Unladen insurance includes coverage for deadheading, the practice of driving a truck with an empty trailer after a trucker drops off a load and is headed elsewhere to pick up another. 

Unfortunately, while a necessary aspect of this business, it is also dangerous. According to Science X Daily, a truck with an empty trailer is two-and-a-half times more likely to crash. Without cargo, trucks are more susceptible to rollovers, particularly in high winds. 

Unladen liability covers truckers whether they are on dispatch or not. 

Trailer Interchange Agreement

This physical damage insurance covers trailers that are being pulled under a trailer interchange agreement. It protects non-owned trailers from physical damage including collision and vandalism.

Reefer Insurance

This relatively inexpensive insurance covers damage done by reefer motor failure. Some policies have certain exclusions such as specific types of products. Coverage may also be denied if the reefer unit was not properly maintained. 

Occupational Accident Coverage (OCC)

Occupational accident insurance provides benefits to owner-operators who are not considered employees.

Trucking companies may provide this insurance that offers benefits to independent operators who sustain injuries while on the job. Owner-operators may also purchase their own OCC insurance. 

Many coverage choices are optional including accidental death and dismemberment benefits, medical expenses, and temporary or permanent disability. 

Excess or Umbrella Insurance

These different types of insurance coverage increase the limits of an underlying policy. They are most often purchased due to a shipper’s request or because of FMCSA regulation. 

Although an added cost for a trucking company as well as independent operators, there is cheap commercial insurance that provides the coverage you need.

In addition to the coverage required by FMCSA, proof of coverage is also required by most shippers and the customers that make up your business who rely on their freight getting to a final destination unscathed. 

Choose the Right Commercial Trucking Insurance

At Strong Tie Insurance, we specialize in commercial truck insurance and understand the many choices large fleets, as well as independent operators, face.

Our comprehensive commercial truck insurance program is specifically designed for your individual needs.

To discuss your insurance needs and how we can provide high-quality and affordable commercial trucking insurance, contact our team at Strong Tie Insurance today.