You decide to become a truck driver. You’re looking to finance or lease your new semi-truck. But before you can get approved for truck financing you need to have commercial truck or semi-truck insurance.
There are several types of commercial truck insurance. We will cover everything you need to know about insuring a semi-truck.
The coverage you need and the cost of truck insurance is dependant on a few factors. One of the factors is your owner-operator status. There are two types of owner-operator status.
Owner-operator under lease to a motor carrier – An owner-operator is an individual who owns their own commercial vehicle or small fleet, typically tractor-trailers. Alternatively, they can provide their truck and driving services to another motor carrier under a lease for a contracted period and operate under that carrier’s authority. For more info just visit: https://www.strongtieinsurance.com/semi-truck-insurance/
Owner-operator under your own authority – Having your own carrier authority means you have the government’s permission to get paid for hauling freight as your own trucking company.
Owner-operators under lease typically pay less due to the motor carrier cover some of the insurance needs.
Owner-operators with their own authority tend to pay more because they’re the owner and have full responsibility and liable for anything that goes wrong while driving, loading and unloading their trucks.
COMMON TYPES OF TRUCK INSURANCE AND WHO NEEDS IT
Owner-operators under their own authority or lease have different insurance requirements.
Here’s a breakdown of the most common types of commercial truck insurance
#1 GENERAL LIABILITY INSURANCE
General liability insurance, also called public liability insurance in the trucking industry, covers third-party bodily injuries and property damage that result from business activities that aren’t related to truck driving.
If a person is injured on your business property, they may make a bodily injury claim against your business. For example, a package delivery man trips on loose carpeting in your accounting office, falls and breaks his wrist. General Liability Insurance can help cover the costs of the bodily injury claim he makes against your business for this accident.
The Federal Motor Carrier Safety Administration states, owner-operators with authority, freight forwarders, and motor carriers are required by law to carry General liability insurance (public liability insurance).
Drivers under lease do not typically need general liability insurance; most are covered by the motor carrier’s policy. (Always confirm with the motor carrier that you’re covered under their policy)
Who needs it – Owner-operators with authority & motor carriers
#2 PRIMARY LIABILITY INSURANCE
Primary liability insurance is also known as trucking liability insurance. Primary Liability Insurance is the core of any good commercial truck insurance policy.
Since this type of insurance is the minimum amount necessary to operate a trucking and transport business. Primary Liability Insurance will not cover damage to your own vehicle or the goods being transported.
Primary liability policies usually require every truck to be scheduled or listed on the policy. Insurance companies will not pay claims if the truck is not scheduled.
Who needs it – Owner-operators with authority & motor carriers
#3 NON-TRUCKING LIABILITY INSURANCE
Non-Trucking Liability, or NTL for short, is truck insurance coverage for when you use your truck for non-business purposes. Non-trucking liability insurance offers you liability coverage for property damage or bodily injury to a third-party.
Any personal use between your return and next dispatch points will be covered under non-trucking liability insurance.
Non-Trucking Liability is primarily for drivers under lease with a motor carrier. Even though they’re usually covered by their motor carrier’s general liability insurance, that policy is only for business activities like hauling cargo, dead-heading or traveling for maintenance.
Drivers still need non-trucking liability insurance to cover non-business driving.
Who needs it – Owner-operators under lease
#4 BOBTAIL INSURANCE
Bobtail Liability insurance is a term coined to apply to auto liability coverage for an owner-operator after a load has been delivered and while the truck is not being used for trucking purposes.
This usually occurs when an owner-operator is operating his or her truck for mobility only, and not in the course of transporting property for the motor carrier under whose operating authority they haul, and on whose liability policy they depend while they are engaged in trucking.
Examples of accidents that can trigger bobtail insurance
- Accident on the way home after a delivery
- An accident between dropping off a load & en route to pick up another load
- Accident picking up your first load of the day.
- Who needs it – Owner-operators under lease
#5 PHYSICAL DAMAGE INSURANCE
Physical Damage Coverage is a general term for a group of insurance coverages that protect your vehicle. This general term includes Collision insurance, as well as your choice of full Comprehensive insurance or the more limited Fire and Theft with Combined Additional Coverage insurance.
Who needs it – All Owner-operators
#6 MOTOR TRUCK CARGO INSURANCE
Motor Truck Cargo insurance (Cargo) provides insurance on the freight or commodity hauled by a For-hire trucker. It covers your liability for cargo that is lost or damaged due to causes such as fire, collision, or striking of a load.
Who needs it – All Owner-operators
#7 WORKERS’ COMPENSATION INSURANCE
Workers’ Compensation Insurance covers the expenses that come with an employee’s work-related illness or injury. There’s even a portion that covers your legal fees if an employee decides to sue. State laws require most employers to carry Workers’ Comp Insurance in case employees are hurt on the job.
Trucking industry-related injuries that are covered by worker’s compensation. (refer to your state laws)
- Traumatic injuries after a truck accident
- Work-related illness from exposure to harmful chemicals
- Stress injuries from repetitive loading and unloading cargo
- Who needs it – All Owner-operators & Motor carriers with employees
For more information with this topic just visit: https://www.strongtieinsurance.com/commercial-truck-insurance/
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