Everything to Know About Trucking Insurance for Business
Apr 01, 2022 - Back to Blog
As a “General Freight” or “For Hire” common carrier, you'll want to protect your precious fleet. With the increasing risk of truck accidents in the U.S., you can't afford to leave your business without coverage.
Of course, you know that insurance is essential; the question is what kind of insurance you really need. You're probably also wondering how much trucking insurance costs and what you can expect to pay in premiums and deductibles.
We've got these answers and more. Here's everything you need to know about trucking insurance for your small business.
When it comes to trucking insurance, there are some non-negotiable coverages you must have. See below for a breakdown of basic commercial liability:
Not to be confused with Trucker General Liability, Primary Auto-Liability covers property and bodily injury for another party. It's also important because it awards you the “Active Authority” status on the DOT FMCSA website.
You'll need coverage of at least $750,000 to comply with federal FMCSA trucking liability regulations. However, the standard for 99.9% of fleets is $1,000,000. In most cases, there is no deductible for Primary Auto-Liability. But be sure to check with Road Ready Insurance Agency for details specific to your policy.
Motor Truck Cargo
Motor Cargo Liability covers the product (AKA “freight”) that your fleet hauls. It can also cover spillage and cleanup costs if the load spills onto the road.
The industry standard for Motor Cargo Liability is $100,000, but know that requirements vary by state, and are also dictated by the type of the freight you will be hauling. Road Ready Insurance Agency can help you find the perfect coverage.
If one of your trucks hauls a refrigerated trailer, you'll need Reefer Breakdown Coverage. Reefer Breakdown Coverage isn't a separate policy but rather an endorsement of your Motor Cargo policy.
Physical Damage Coverage
With Physical Damage Coverage, you'll be protecting your equipment in the event of a loss. Road Ready Insurance Agency will help you determine the perfect dollar amount to avoid unnecessary penalties. We can also advise you on whether gap insurance is a smart move.
Now that you know the basics, you should be aware of additional coverages. Below, we go over common policies and help you determine whether you'll need them.
Trailer Interchange Coverage
Trailer Interchange Coverage is for companies that pull other people's trailers instead of owning their own. If you have a semi-tractor with dry van, the recommended Trailer Interchange amount is $30,000 to $40,000. This number goes up for reefers and specialty trailers.
Trucker General Liability
Trucker General Liability is responsible for medical payments, property damage, and other expenses not related to trucking. It's not necessarily required, but you will need a policy to pull freight for companies like Amazon. The standard amount is 1 million per occurrence / 2 million aggregate.
Non-Trucking Liability (Bobtail Insurance)
If you don't have your own Authority or Primary Auto-Liability insurance, you should get Non-Trucking Liability.
To illustrate what this policy covers, let's use an example.
You're in between jobs and are currently not under dispatch. Before you start your next job, you drive your semi-tractor to visit a family member or friend close to your location. If anything were to happen during this visit, Non-Trucking Liability would have you covered. A claim would not qualify under Primary Auto-Liability as you were not under dispatch.
Are There More Policies?
There are tons of different policies available. They become relevant if you are a large company or in a specific industry that needs to comply with DOT FMCSA trucking liability regulations. Examples of industries include auto transportation, overweight, hazmat, or home movers. However, we've tried to keep it as simple as possible. The above policies should be everything that most smaller fleets need.
How Much Should My Trucking Insurance Deductible Be?
Deductibles will vary depending on your company and the policy you have. Typically, shippers and lenders will accept deductibles that are $2,500 or less. Any more, and they may refuse to partner with you. High deductibles are unfavorable as they carry the risk of you being unable to pay them.
What Is the Average Cost of a Full Trucking Insurance Policy?
Now for the question that's on everyone's mind — how much is it going to cost?
On average, you'll pay anywhere from $15,000 to $30,000 for one rig.
However, the cost will vary depending on several factors such as:
- How long you've had your CDL (the longer you've had your CDL, the better)
- How long you've been in business
- Where your business is located
- The ages of your drivers
- Driving record
- Which provider you choose
- Rate of company growth
- How expensive your vehicles are
Still Have Questions About Trucking Insurance?
Unfortunately, getting trucking insurance isn't a simple task. It really pays to know the exact type of coverage you need; otherwise, you won't end up with the protection you need for your fleet.
This guide should clear up any confusion you have about seeking trucking insurance. Whether you're looking for primary auto-liability or physical damage coverage, there are several other options available that may be appealing, such as interchange coverage and bobtail insurance.
Have more questions about seeking trucking insurance? If you need more expert advice, contact our commercial liability professionals today. We're eager to walk you through the confusing process and help you settle on the perfect policy.