Employing over 7.3 million people, and moving 10.5 billion tons of goods annually, it is no wonder that the truck industry is considered to be the pistons that keep America’s economic engines pumping.
With so many vehicles on the road, the Federal Motor Carrier Safety Administration (FMCSA) has enacted strict rules about insurance coverage. This is due in part to the risks related to freight trucks, which can cause extensive amounts of damage due to their weight, size, and hazardous cargo loads. Apparently, they are also more than three times more likely to be stolen than other motor vehicles, so if this is news to you be sure to read more here.
Simply put, trucks cannot roll without trucking insurance, and the FMCSA will only issue operating authority to a trucker with proof of both cargo and liability insurance. These insurance coverages can vary based on the type of freighter and what it carries, with hazardous shipments being subject to a higher level of insurance and stricter regulation.
Fortunately, the process of obtaining commercial truck insurance is not as difficult as one might expect. You just need to follow the appropriate procedures and know what to be aware of in advance.
To obtain commercial trucking insurance, you will first need the following:
The FMCSA requires that interstate trucking companies meet a minimum limit of coverage based on the type of freight they haul.
These are as follows:
If you carry non-hazardous freight moved-in trucks under 10,001 lbs, a $300,000 liability policy is mandatory.
If your truck carries non-hazardous freight but weighs over 10,001 lbs, a $750,000 primary liability coverage is required. Some brokers may require a minimum of $1,000,000.
For oil moved by for-hire and private carriers, you will need a minimum of $1,000,000 in primary liability. Whereas other hazardous material moved by for-hire and private carriers involves a policy that is no lower than $5,000,000. This is due to health risks and the expenses involved with cleaning up hazardous spills. This sort of truck insurance has to be carried at all times, especially if you transport radioactive materials, gases, explosives, or anything considered poisonous via inhalation.
These liability insurance policies also cover bodily injury and property damage. So if a pedestrian or another driver incurs any medical expenses due to a collision, the liability policy will address these bills.
In addition to liability insurance, the goods inside of a truck should also be covered in the event of a crash. This portion is typically handled through cargo insurance, which covers property in transit. If a trucking company delivers anything that is not considered hazardous, opting for additional cargo insurance is an intelligent choice. In certain circumstances, like delivering household goods across state lines, federal law requires you to have cargo insurance. Standard commercial trucking insurance for cargo starts at $100,000 and can be adjusted based on the cargo being hauled.
And then there is voluntary coverage. Although voluntary coverage is not required by law, it is advisable, as it protects the truck itself. For example, physical damage coverage will protect trucks against natural disasters like floods and fires. It will also cover vandalism, theft, or a collision with something like a large animal. Other voluntary coverage is a non-trucking liability, or “bobtail insurance,” which covers trucks traveling without a trailer or that are temporarily off the road for servicing.
Those that run a trucking company will need additional forms of insurance to protect their employees, as well as coverage for more long-term trucking business-specific risks.
Some of this insurance includes:
Workers comp insurance – deals with medical expenses and disability payments for employees who are injured on the job
Property insurance – protects parking terminals and buildings where trucks may be kept
Health insurance and employee benefits – will help attract the best truck drivers and preserve their health
Cyber liability insurance – covers data breaches, credit card issuer issues, and other forms of cyber attack
Commercial trucking is a challenging business to get into and remain successful, so it is no wonder that trucking insurance is mandatory. So as much as we despise the act of buying insurance, it is a vital part of being a carrier in the trucking industry.
Fortunately, by engaging the services of a company that can handle commercial trucking insurance, you will have peace of mind in knowing that your business will be covered, along with your clients’ cargo and your employee’s safety.