For owner-operators and trucking companies, the safety of their equipment and cargo is paramount. Trucks and trailers delivering freight on the roads can be exposed to various risks, such as accidents, theft, or damage, making it a serious safety concern for truckers. Statistics show that thousands of trucking accidents happen every year in the country, causing the trucking industry to lose millions of dollars.
Truckers seek ways to protect their fleet from accidents, damages, or theft. That is where commercial trucking insurance comes in handy. With the right trucking insurance policy, you can protect your business, fleet, and cargo you’re hauling from potential financial losses and damages. In this article, we have discussed the fundamentals of commercial trucking insurance in detail.
What is commercial trucking insurance?
Commercial trucking insurance, also called commercial auto insurance, is a legal contract between a trucker (owner-operator or trucking company) and an insurance company. It provides coverage for the trucker’s fleet, trailers, and cargo against accidents, physical damages, and financial losses that occur due to theft incidents. Commercial trucking insurance is specially designed to protect the interests of trucking businesses.
Why do you need commercial trucking insurance?
If you’re an owner-operator or running a trucking company, you’re legally required to carry the minimum commercial trucking coverage to comply with safety regulations and carry out your business operations without any legal complications. A trucking insurance policy is not only a legal requirement but also in the larger interest of your business. It saves you a lot of money you would likely pay for repair or replacement costs if your truck or trailer gets damaged while hauling freight.
What type of coverage does commercial trucking insurance provide?
Before you consider purchasing a trucking insurance policy for your business, it’s important to know about the different types of coverage it offers. Here, we have discussed some primary coverages that commercial truck insurance provides.
· Liability coverage
Trucking insurance offers two types of liability coverage:
Primary liability coverage
Primarily liability coverage protects you from third-party claims regarding a bodily injury or property damage caused by your trucks or trailers. FMCSA obligates truckers to carry a minimum primary liability coverage of $750000.
General liability coverage
General liability coverage protects you from third-party lawsuits regarding bodily injuries, property damages, or mistakes during loading and unloading processes outside your business premises.
· Physical damage coverage
Physical damage insurance covers the repair or replacement costs if your trucking equipment (trucks or trailers) gets damaged due to an accident or theft. It’s one of the mandatory coverages of trucking insurance. It also covers the damages to your truck or trailer due to a collision with another vehicle.
· Cargo coverage
This type of trucking insurance coverage protects the cargo being hauled by your truck or trailer from damages or losses caused by accidents, theft, or other covered perils. Cargo coverage covers most commodities that are transported on trucks.
· UIM/UM (Uninsured/Underinsured) Motorist Coverage
UIM/UM motorist coverage protects your truck and driver involved in an accident caused by uninsured or underinsured drivers who don’t have enough coverage to pay for your losses. This coverage reimburses you for the repair or replacement costs of your damaged trucking equipment.
· Medical payment coverage
As the name suggests, medical payment coverage reimburses you for medical bills and treatment costs if the driver or passengers of your business truck gets injured due to an accident. This coverage is mandatory in some states and optional in others.
· Non-trucking liability coverage
This type of insurance covers your trucks against damages and losses when they’re parked at your business place and are not in operation.
Besides these coverages, you may also add several other optional coverages to your policy, such as motor truck cargo coverage and trailer interchange coverage. The type of coverage you need on your commercial trucking insurance policy entirely depends on your coverage needs and the nature of the trucking services you offer.