Common commercial truck insurance coverages include:
1. Primary Auto Liability (also known as Trucking Liability, or Commercial Auto Liability [CAL])
All interstate truckers are required by federal regulations (FMCSA) to have this insurance coverage. Every one of your trucks, including leased units, must carry commercial auto insurance. Liability insurance will provide you with protection when a third party becomes injured from an accident. It’s lawsuit protection coverage. Standard limit required for 99% of truckers is $1 million Combined Single Limit (CSL) (even though law requires $750,000, but brokers and freight forwarders require $1M). If they haul hazmat the limit required is $5 million, unless it’s oil and light hazmat in which case $1 million is sufficient.
2. Trucking General Liability (GL)
Every state requires General Liability coverage – it could be separate coverage or an add-on, depending on the insurer. It protects you if one of your drivers causes property damage or bodily damage because of a crash. It covers a driver’s actions who is operating on another person’s premises, like truck stops or loading docks. It also includes load delivery mistakes.
3. Physical Damage
Physical damage coverage will pay for a commercial truck or trailer repairs from damage by things like:
- Vandalism
- Collision
- Theft
- Natural disasters
Alternatively, if your truck becomes damaged beyond repair, this coverage will replace it. The cost of the truck and equipment will determine the premiums, but in 2023 it is usually around 6% of the stated value of the truck.
4. Bobtail vs. Non-Trucking Liability (NTL)
Bobtail coverage, also mistakenly confused with non-trucking liability (NTL), is coverage for circumstances where the truck driver is driving the truck without a trailer for personal reasons or is off dispatch. Any situations where the owner-operator isn’t covered by primary liability coverage, bobtail coverage will cover kick in. But, bobtail insurance doesn’t protect truck drivers when they’re pulling a trailer, using a truck to make money or driving a truck for a trucking company. When driving a truck with a trailer for personal reasons or off-duty that’s called Non-Trucking Liability (NTL) coverage. NTL is required for owner-operators (O/O).
5. Motor Truck Cargo
This coverage provides you with protection if the cargo on one of your commercial trucks is lost or damaged. Premiums will depend on the freight type. Brokers require it. Limit is usually $100,000.
6. Rental Reimbursement
Rental reimbursement add-on is exactly what it sounds like — it provides you with money for renting a replacement truck while your vehicle is being repaired.
7. Trailer Interchange
Trailer Interchange insurance add-on provides Physical Damage insurance for trailers being pulled under a trailer interchange agreement. This is essentially Physical Damage insurance for non-owned trailers. This insurance protects you if the trailer is damaged by collision, fire, theft, explosion or vandalism.
8. Medical Payment
Medical payment coverage (an add-on to trucking liability) pays for any medical bills you or a passenger incur while driving or riding in the truck. Each state will vary in this coverage.
9. Uninsured/Underinsured Motorists
This insurance add-on to trucking liability will protect you if another person hits you and doesn’t have liability insurance.
10. Reefer Breakdown Coverage
If you own refrigerated trucks, reefer breakdown coverage is an add-on to Physical Damage policy and would cover the cost of things like:
- Refrigeration breakdown
- Lost cargo
- Damage to products because of a collision
Some insurance policies have exclusions. For instance, certain products are excluded, such as tobacco products, frozen food, or seafood.
11. Occupational Accident
Worker’s compensation insurance is for W2 employees. Since often truckers are 1099 independent contractors who haul for many different brokers and shippers, they don’t have worker’s comp. Occupational accident insurance is affordable (some 50% cheaper than worker’s comp) and will provide coverage for things like lost wages, medical expenses, and death benefits up to whatever the policy limit is. You can choose the deductible, limits, and coverage for disability.
How Much Insurance Does A Trucking Company Need?
There are a multitude of laws and regulations that govern how much truck insurance you need to carry.
- Most independent truckers and trucking companies must comply with coverage requirements set by the Federal Motor Carrier Safety Administration (FMCSA). Rules will differ based on various factors.
- If you finance a truck when you buy it, then you might have to buy physical damage insurance.
- Certain trucking companies must carry surety bonds.
