If you are in the trucking business, you know that you will need liability insurance in case one of your drivers causes an accident. However, a trucking company needs many different types of insurance to be safe. You will need to make sure that your client’s cargo is protected and that your vehicles can be repaired after a collision. If you carry specialized products, you will need to have coverage for the vehicles In which you carry those products. You will also need general insurance just as any other business would. According to
Simplex Group, you will need six basic types of insurance to run a small trucking company. All of this may seem like a lot, but you would not want to be caught without any one of these important kinds of coverage. You can bundle your insurance to save money.
Liability Insurance
Liability insurance will pay your bills if one of your drivers has an accident. It will cover the medical expenses of anyone that your driver hurts and it will also cover repairs to their vehicle. Not only is it extremely important to have liability insurance, but the Federal Motor Carrier Safety Administration which oversees the trucking industry requires you to have this type of coverage to operate your company legally. The FMCSA requires trucking companies that cross state lines and operate vehicles that weigh 10,001 pounds or more to have between $750,000 and $5 million of insurance depending on what type of cargo they haul. Drivers who carry hazardous material in a certain amount are held to those same standards. If you drive a truck that weighs under 10,001 pounds and crosses state lines, you will have to have $300,000 of insurance if you are hauling non-hazardous material. It is highly recommended that you have more insurance than the minimum amount for the category of product you haul. Trucking accidents are extremely expensive and the cost can wipe out a small trucking company if that company is not fully insured.
Cargo Insurance
Cargo insurance is required for the safety of the products you carry as you travel across the country. When you make
a contract with your clients, it will specify the amount of cargo insurance you must have to haul their products. In some cases, this amount will be based on the wholesale value of the product. In other cases, the client may insist that you cover them for money they will lose if their customer does not get the product in time. You can decide the amount of coverage that is best for you when you talk to an insurance expert. They will be able to tell you how much coverage is worth your while in the case of each client. There are many different kinds of things that can happen to cargo on a trip. Products may become damaged if your driver has an accident. Even if the driver did not cause the accident, your company may still be liable for the cargo inside the truck. In some cases, a driver may accidentally leave cargo at the wrong address or even leave the back of their truck open. Although trucks have anti-theft systems, theft is not unheard of. There has been a recent rash of highway piracy. Cargo insurance will pay for products in all of these situations.
Physical Damage Insurance
Physical damage insurance will cover the cost of repair or replacement of your trucks when your driver causes an accident. Liability insurance will only pay for damages to other people’s vehicles. Trucks cost thousands of dollars and it is very important to have this type of insurance. If you are financing your trucks, the financing company is sure to insist that you have this kind of coverage. If you have investors in your trucking company they will want to see proof of physical damage insurance as well.
Reefer Insurance
If you operate reefer trucks, you will need this kind of insurance in case the freezing system should fail. Frozen foods are not normally covered by a regular cargo insurance policy. This is because of all the damage that melted frozen foods can cause. Not only do they make a mess, but they can ruin the inside of the truck. If frozen foods spoil along the way, the company you are delivering them to will not be able to sell them. Also, If you are delivering packages to individual people, You will have to inform them that their products have been spoiled. If you are unaware of the refrigeration failure, people may consume the spoiled goods and become sick. They can
sue your client, and in turn, your client can sue you.
Bobtail Insurance
From time to time, your drivers may detach their trailers and take their truck home for the night. Your liability insurance will not pay for an accident if it happens outside of working hours. Bobtail insurance will take care of any bills from an accident that occurs when your driver is off hours. If your drivers never take their trucks home, you will not need this type of insurance.
General Insurance
Every company that works out of a physical office should have general liability insurance. This type of insurance will cover you if a visitor to your property is injured while they are there. Trucking companies are
busy places with lots of activities going on. It is not unusual for a tool to be left out where somebody can trip over it or for oil to spill on the garage floor. General Insurance will pay the hospital bills of anyone who slips and falls at your place of business. Trucking is very important work and every person in the country relies on it in one way or another. Insurance will help you compensate individuals and clients if you cannot get your products where they are going in the time that they are expected to get there.