Commercial trucking is a critical business that keeps America running. Everything from the food you buy in stores to the conveniences and items you rely on in your day-to-day life likely spends at least some time being transported by commercial trucking companies.
In order to protect their substantial investment in vehicles and other technology they use, commercial trucking businesses rely on insurance. But is insurance required, or can the cost of coverage be used for other things? Here’s the kind of insurance you need as a commercial trucker.
Mandatory Commercial Trucking Insurance Coverage
The kind of insurance that a commercial trucking company needs depends on the type of trucking that they do, what they carry, whether they operate across state lines, and more. However, in general, there are a few types of policies that are mandatory no matter what kind of commercial trucking you do. These are:
- Liability insurance – This type of policy protects a trucker from liability if they cause damage to a person’s property or injure someone in the course of their work. If a commercial truck digs ruts into someone’s yard or hits a person going across a crosswalk, a liability insurance policy can offer protection. Because commercial vehicles are large, they can cause more damage than the average car. As a result, their minimum coverage levels are higher, with most trucking businesses needing at least $500,000 in protection. This number varies based on cargo (with hazardous materials needing more insurance) and truck size (trucks less than 10,000 pounds can enjoy lower minimums).
- Cargo insurance – This coverage protects the cargo that you are transporting. While this is a valuable safeguard to have for any trucking business, intrastate operations are not required to carry it. However, if you transport household goods via interstate, federal law dictates that you must carry cargo insurance. The exact amount of coverage required will depend on your state and the type of cargo; hazardous materials, for example, come with higher minimums.
Optional But Useful Coverage Types
Of course, each state is unique in the types of insurance that it requires, as well as any applicable minimums. However, commercial trucking businesses are welcome—and encouraged—to secure coverage beyond just the state and federal minimums. Some of the most common types of protection include:
- Non-trucking liability – When a truck is being operated for non-trucking purposes, like being serviced or being moved between jobs, its standard coverage does not protect it. Non-trucking liability, which is also called bobtail or deadhead insurance, covers trucks during these interim periods and is a good choice for companies that regularly operate without a trailer.
- Physical damage – Because trucks carry valuable cargo, they are more prone than the average vehicle to experience theft, vandalism, and other damages. Physical damage policies help owners recover from the cost of damages to a truck.
- Trailer interchange – Certain types of trucking companies will make some or most of their profit using trailer interchange agreements. These allow a trucker to transport a trailer that is not theirs and can provide opportunities for businesses to get their cargo from point A to point B in an affordable way. However, because the trucking company does not own that trailer, their own cargo insurance and physical damage coverage do not apply. Trailer interchange coverage bridges this gap.
- Uninsured and underinsured – Even if an accident is not the fault of the trucker, they can still be left on the hook for damages if the other driver does not have enough insurance coverage (or none at all). U&U insurance protects truckers from being responsible for damages regardless of what type (and how much) insurance the other party carries.
- Reefer – For vehicles that transport refrigerated cargo, standard cargo insurance does not usually cover the additional factors at play. Instead, reefer breakdown coverage protects the trucker against loss resulting from a breakdown of the refrigeration system, as well as loss from cargo that spoils or becomes unusable.
Trust the Pros to Help You Select Ideal Coverage for Your Commercial Trucking Venture
Whether you are reconsidering your existing commercial trucking coverage or are looking to add additional policies to better protect your business, be sure to select the policies that will reduce your liability as much as possible. Businesses can maximize their coverage and reduce their expenditure by working with an experienced and reputable trucking insurance company.
The experts at Burton & Company can help you select the right protection for your needs and keep you in compliance with federal and state requirements. Reach out to learn more or to schedule an appointment to get started.
