Types of Trucking Insurance: A Closer Look at Coverage Options

When you open a trucking business, you might operate several trucks or manage a fleet. Yet, regardless of how many trucks you have, there is no guarantee that your drivers won’t be involved in an accident at some point in time.

Starting or managing a trucking business isn’t easy; even one incident can turn your business around, and having insurance is also a legal requirement. Because of this, trucking businesses will need commercial trucking insurance to protect their vehicles and drivers in the event of an accident and also abide by the law.

Some of these trucking insurances are meant to provide cover for specific liability issues or perils. Others are meant to protect your drivers or vehicles even when they aren’t transporting cargo.

To understand exactly what type of insurance might best benefit your company and your specific needs, you should contact an insurance provider and discuss your situation. Let’s take a look at the various types of commercial trucking insurance available and see what they cover!

Primary Liability Insurance

Primary liability insurance is the most common commercial trucking insurance, which is also the legal requirement for commercial trucking operations. This insurance provides coverage for:

  • Bodily injury
  • Property damage caused to others

It is the most important type of insurance since if the trucking company or its drivers are responsible for the accident, this insurance provides coverage for both public liability and property damage liability.

General Liability Insurance

The general liability insurance for trucking companies offers coverage for non-trucking-related liability exposures. It protects the trucking company in the event of claims related to premises liability, contractual liability, advertising injury, and other non-vehicle-related liabilities.

Physical Damage Coverage

Among the most important commercial trucking insurance is physical damage coverage. Trucking companies either own or lease vehicles all the time. Furthermore, their vehicles might not always be safe when they aren’t operated.

Because of this, physical damage coverage is essential as it protects leased or owned vehicles against damage or loss resulting from theft, vandalism, collisions, fire, or other covered perils. This insurance comprises two components, namely collision coverage and comprehensive coverage.

Collision coverage is used when the insured vehicle is involved in a collision with another vehicle or object and needs repairs or replacement. This coverage provides support for the necessary costs involved.

The comprehensive coverage covers all non-collision incidents, from theft to vandalism, fire, hail, or other specified perils.

Cargo Insurance

Another crucial type of insurance that trucking companies should consider is cargo insurance. Trucks carry valuable or dangerous cargo all the time. However, cargo insurance protects your cargo against damage, loss, or theft during transit. Cargo insurance can be tailored to specific types of cargo.

For example, you might need it for general freight, refrigerated goods, hazardous materials, or specialized cargo. All of these imply different costs, requirements, and rules, and it is important to note that the FMCSA doesn’t issue operating authority if you don’t have proof of cargo insurance and liability.

Trucks that transport valuable goods are often more targeted for theft than other types of trucks, and because of this, they cannot operate without this type of insurance. Yet, if you don’t want to spend too much on this type of insurance to operate, you can always go with the minimum insurance requirement.

Yet, the minimum requirement for commercial coverage depends on what freight you haul. Here is what you should consider:

  • If you transport non-hazardous materials in vehicles under 10,001 lbs, you will need a minimum coverage of $300,000.
  • If the non-hazardous materials are transported in vehicles over 10,001 lbs, you will need a minimum of $750,000 coverage.
  • If for-hire or private carriers transport oil, they will need a minimum of one million dollars in coverage
  • When for-fire or private carriers transport hazardous materials, they will need a minimum of five million dollars in coverage.

Non-trucking Liability Insurance (NTL) or Bobtail Insurance

The NTL insurance stands out from other types of insurance as it covers your company vehicles when they aren’t operated for business purposes. Some of your drivers might use the vehicles for non-business purposes or personal use, but your company is at risk without this coverage. The coverage only applies when the truck is not under dispatch or carries cargo for a client.

Occupational Accident Insurance

If you have independent contractors working for your trucking company or if there are owner-operators who are not covered by workers’ compensation, then occupational accident insurance is a great way to provide coverage.

This insurance can help with disability, medical expenses, accidental death, or dismembering resulting from work-related accidents.

Umbrella or Excess Liability Insurance

If you want to go beyond the limits of primary liability insurance, then umbrella or excess liability insurance is the way to go. This insurance provides higher limits of liability protection, which can be crucial in protecting your trucking company in the event of catastrophic losses and lawsuits that often exceed the primary liability coverage limits.

Trailer Interchange Insurance

If your trucking company is hauling a non-owned trailer under a trailer interchange agreement, you might need trailer interchange insurance. This type of insurance protects your trucking companies’ liability for the non-owned trailer while it is under your possession or control. It covers both damage and loss for the trailer.

Understanding Commercial Truck Insurance

Any type of transportation-related activity related to trucks is subject to the FMCSA regulations and will need commercial truck insurance to operate. This applies to:

  • Independent truck drivers
  • Commercial transportation businesses (this applies to any business with trucks and drivers)
  • Independent owner-operators

It doesn’t matter if you have one truck or an entire fleet. You cannot conduct your business legally without a commercial truck insurance policy. To receive the best coverage and protection for your vehicles and drivers, consider contacting an insurance provider specializing in commercial truck insurance.

They can help you make an informed decision and receive the best coverage depending on the cargo you transport, where you transport it, what type of freighter you have, and more.