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    Insurance Types for Trucking Businesses

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    When you operate a trucking company, there are various responsibilities that fall your way, and among the most important aspects of any business is insurance. According to Simplex, trucking businesses typically require several types of insurance coverage to protect their operations, assets, and liabilities. Also, they cannot legally operate without certain types of insurance plans. 

    Keep reading to get a comprehensive view of the various types of insurance plans in the trucking industry and learn which ones you are legally obligated to have.

    Commercial Auto Liability Insurance

    Commercial auto liability insurance or primary liability insurance is the primary insurance coverage that is mandatory for trucking businesses. It provides liability protection for bodily injury and property damage if the event is caused by one of your commercial vehicles. The coverage typically includes third-party injuries, property damage, and legal defense costs. 

    Physical Damage Insurance

    Physical damage insurance protects your owned or leased vehicles from physical damage resulting from collisions, vandalism, theft, or other covered perils. It can also include comprehensive coverage for non-collision incidents such as fire, falling objects, or hail. 

    Truck companies lease vehicles frequently and there is no guarantee that their trucks will stay safe while they are in storage or that collisions won’t occur at some point in time. So this coverage is essential as it provides much-needed support for any possible expenses.

    Cargo Insurance

    Cargo insurance is another type of mandatory insurance in the trucking industry. Without it, truck companies might not receive operating authority from the FMCSA.

    Cargo insurance is a critical type of insurance plan for trucking companies as it covers the goods or freight being transported. It protects against cargo loss or damage caused by accidents, theft, or other unforeseen events. The coverage amount may vary based on the value and cargo type.

    You can opt for various types of cargo insurance depending on what you transport, from refrigerated goods to general freight, hazardous materials, or specialized cargo.  The minimum requirements for commercial coverage are the following:

    • A minimum of $5,000,000 in coverage when for-hire or private carriers transport hazardous materials
    • A minimum of $1,000,000 in coverage for private or for-hire carriers that transport oil
    • Minimum of $300,000 coverage for vehicles under 10,001lbs transporting non-hazardous materials
    • Minimum of $750,000 coverage for vehicles over 10,001 lbs transporting non-hazardous materials

    Cargo insurance is essential for truck companies because trucks that transport goods are a common target for theft. Opt for the minimum insurance requirement to ensure FMCSA compliance and choose higher coverage options if your vehicles operate in areas with high theft rates.

    General Liability Insurance

    General liability insurance covers third-party claims of bodily injury, property damage, or personal injury arising from trucking business operations. It can cover incidents that occur at your premises or while performing services at customer locations. It is a beneficial insurance plan that can help your business continue to conduct its activities without being hindered by accident expenses.

    Workers’ Compensation Insurance

    Workers’ compensation is required in most U.S. states. It provides coverage for medical expenses, disability benefits, and lost wages for injured employees or those who become ill due to work-related tasks. It is meant to protect both the employees and the employer. For trucking businesses that want to have a different alternative to workers’ compensation, they can choose occupational accident insurance.

    Occupational Accident Insurance

    Occupational accident insurance is beneficial for independent owner-operators or leased drivers. It provides coverage for medical expenses, accidental death, disability benefits, and dismemberment benefits in the event of work-related accidents or injuries.

    Umbrella Insurance

    Umbrella insurance provides additional liability coverage beyond the limits of primary liability policies, such as commercial auto liability and general liability. It offers an extra layer of protection in case of a catastrophic event or a lawsuit that exceeds the limits of a truck company’s underlying insurance policies. 

    Excess liability insurance might be a better alternative insurance coverage option in the event of a death, severe injury, or other situations.

    Bobtail Insurance or Non-Trucking Liability Insurance (NTL)

    Bobtail insurance is useful for providing protection when trucks are operated without a trailer or while they are not under dispatch. This type of insurance provides liability coverage for accidents that occur during these non-business use periods.

    Non-trucking liability insurance also covers your trucks for personal use or when the truck is not under dispatch during non-business periods.

    Environmental Liability Insurance

    Environmental liability insurance protects your company against pollution and environmental damage allegations that can be brought against you for your trucking operations. It can cover costs associated with cleanup, legal expenses, and third-party claims related to pollution incidents.

    Trailer Interchange Insurance

    Trucking companies sometimes haul non-owned trailers under a trailer interchange agreement. If your company engages in such operations, trailer interchange insurance can be beneficial for additional protection. Trailer interchange insurance protects against liability issues for the non-owned trailer as long as it is under your company’s possession or control. Trailer interchange insurance can cover both the loss of the trailer and any damage to it.

    FMCSA Regulations and Commercial Truck Insurance

    All transportation-related activities that are related to trucks are subjected to FMCSA regulations, which mandate the usage of commercial truck insurance to operate. These regulations extend to independent truck drivers, commercial transportation businesses, and independent owner-operators.

    Regardless of how many trucks operate under a trucking company, business cannot be conducted legally without a commercial truck insurance policy. Choosing the right insurance coverage for your trucking company can be a challenging decision as you not only have to ensure that you receive the required insurance plans to operate legally but also have to analyze potential risks and various insurance plans to receive additional coverage and protection.

    To ensure that you choose the best coverage and protection for your company, vehicles, and employees, you should contact an insurance provider that specializes in commercial truck insurance.

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