What Kind of Insurance Do Trucking Owner-Operators Need?
Anyone who owns a trucking business as an owner-operator is certainly familiar with the amount of risk involved with traveling cargo. Anything can happen on the road. A single accident can cause tens of thousands of dollars in damage that can be devastating to a business. Your business is your livelihood. It’s absolutely critical that owner-operators have safeguards in place to protect themselves against liability for damages than can be caused by an array of factors. Insurance is meant to save you money. While it is a main fixed cost for any owner-operator, it is possible to select insurance products within your budget that will afford you and your employees peace of mind.
Common Coverage for Owner Operators
Motor truck cargo insurance
Motor truck cargo insurance is coverage for cargo being transported via truck. Drivers need to be covered as they are responsible for the cargo while it is in their possession. Motor truck cargo insurance protects against third-party claims and applies to the extent of the insured’s legal responsibility for the goods. At any one time, a truck might be transporting tens or hundreds of thousands of dollars. Having to pay a large sums in damages can be absolutely devastating for a business. Owner-operators need to be able to protect themselves and their employees against responsibility for damages, and motor truck cargo insurance is an important way to do that.
Motor truck cargo coverage generally protects owner-operators and truckers against the following hazards:
- Traffic accidents
- Weather events
- Water damage
- Environmental damage
- Damage due to poorly secured load
- Natural disasters
- Transportation hazards
Auto liability insurance
Auto liability coverage pays for damage caused by the insured to another person’s property in an at-fault accident. It can be used to cover repairs to the other vehicle or replacing it all together. It can also be used for medical expenses. Many shippers and owner-operators need $1 million in liability coverage. The minimum required by the Federal Motor Carriers Safety Administration is $750,000.
There are two types of auto liability insurance: primary and non-trucking. Auto liability is classified as primary if you are operating under your own authority. Those not operating under their own authority require non-trucking liability coverage. As an owner-operator, the purpose of auto liability insurance is to protect your business by covering costs that you are legally obligated to pay if you or one of your drivers injures someone, damages their property, or both, in an accident.
Motor truck general liability insurance
Motor truck general liability insurance pays for property damage or injuries caused as a result of business-related activities not related directly to using your truck. This is important insurance for owner-operators to purchase for their employees and is often required for for-hire truckers. Some examples of situations covered by motor truck general liability insurance include:
- Customers slipping/falling
- Cargo delivery resulting in damage
- Fire due to error by the insured
- Actions of a driver while representing the insured
Physical damage coverage
Physical damage coverage protects against loss or damage to the insured’s vehicle resulting from an accident involving another vehicle or object. It is a general term that refers to a group of coverages that protect your trucks, including:
- Collision insurance – In order to protect your trucks from damage caused by other vehicle or objects, you should invest in collision insurance. It pays for damages done to your vehicle – even if it is totaled – in a collision.
- Comprehensive insurance – Comprehensive coverage protects your vehicle from damage caused by something other than a collision.
- Theft and fire insurance – Sometimes called specified perils insurance, theft and fire coverage, of course, protects your vehicle from damage caused by fire and theft occurring as a result of a non-collision incident.
Uninsured motorist insurance
In the event of an accident with someone who does not have liability insurance, uninsured motorist coverage protects truckers against damages. This type of insurance varies by state. It is generally categorized into three different products:
- Uninsured motorist insurance – This type of coverage pays for medical bills, lost wages, and pain and suffering caused by a driver who has too little insurance to cover all of the expenses.
- Uninsured motorist bodily injury insurance – This covers medical expenses resulting from an accident or a hit-and-run caused by a person with no insurance.
- Uninsured motorist property (UMPD) damage insurance – UMPD pays for damages an uninsured driver causes to your truck.
Choosing Your Coverage
Fortunately, there is a range of coverage available for owner-operators. It is easy to compare rates and find the insurance products that will work within your budget. You can choose to unbundle your coverage, which allows you to select the specific coverage that you foresee needing based on your business, where you operate, and any other factors that are important to you. Insurance bundles often include add-ons that you may not need, but will end up paying for anyway. You can work with an insurance professional to select the best, most cost-effective coverage you need.
24/7 claims service is essential in today’s fast-paced world. The sooner your insurance provider can get involved, the better the odds are that everything will go smoothly and be taken care of quickly. It’s easy to compare deals from different providers and make sure you’re choosing a service that works for you when you need it.
You’ll want to work with an insurance professional to choose policies with transparent deductibles. The deductible is what you will have to pay after a loss before your insurance covers the rest. For example, if you have a $1,000 deductible and sustain a $5,000 loss, you will first pay the $1,000 and the insurance company will pay the remaining $4,000. One company may have separate deductible for each truck and cargo, meaning that you will have to pay more in the event of an accident. It’s important to explore your options and make sure you are selecting coverage with manageable deductibles.
If you are an owner-operator looking for insurance, contact OspreyWatch or give us a call at 888-9OSPREY (888-967-7739) today. We are here to help you choose the best insurance products to protect your business and safeguard your employees against liability for damage. Request a free motor truck cargo quote today.