If you are starting a trucking company, you probably noticed that there is an awful lot of insurance that you will have to buy.
It can be a bit overwhelming to look at all the different kinds of policies required. You may wonder what each of these policies is actually for.
Believe it or not, all the insurance that an insurance adjuster will recommend to you is necessary. Each type of insurance offered to trucking companies covers something very specific.
Liability is the only type of trucking insurance that is required by the Federal Motor Carrier Safety Administration.
If you haul hazardous materials in a certain amount over state lines or if you operate a vehicle that is over 10,000 pounds and crosses state lines you will need to have at least $750,000 to $5,000,000, depending on the type of cargo you are carrying.
You will have to have $300,000 of coverage for non-hazardous cargo if your vehicles weigh less than 10,001 pounds.
Liability insurance will pay the medical bills of anyone who is injured in an accident that one of your drivers causes.
It will also pay for damage to their vehicles. A commercial trucking accident will often cause major damage to the road.
For example, cargo may spill and it will have to be cleaned up. Liability insurance will pay for this.
If a truck is carrying hazardous material, it can do major damage to the road construction and the air itself.
A community where an accident happened may be impacted for years. Insurance can help to pay for environmental cleanup.
If the accident did damage to buildings and structures in the area, liability insurance should also pay for that.
The FMCSA requires that trucks that carry household goods such as moving trucks must have $5,000 worth of cargo insurance per vehicle and $10,000 of insurance for every accident.
The required insurance will have to reimburse a family if a moving company loses or damages its furniture.
When it comes to commercial trucking, things get quite a bit more complicated. The FMCSA does not require tracking companies to have cargo insurance.
However, all trucking companies need cargo insurance, or they would never be able to get any clients.
Cargo Insurance protects your client’s property as you are traveling across the country. If you are robbed or get into an accident, cargo insurance will pay for the stolen or damaged property.
If there is a natural disaster that destroys all of the cargo in your truck, cargo insurance should cover that as well. It will also cover any lost property.
When you make a contract with your client, it should specify the amount of cargo insurance that you will carry. It should cover the wholesale cost of the products at the very least.
In many cases, a client will want you to pay them additional damages. This is because they also have clients to answer to who are counting on the product to sell in their stores.
Physical Damage Insurance
If one of your drivers causes an accident, your liability insurance will pay for damage to other people’s property and their medical bills.
Unfortunately, liability insurance will not pay for damage to your own truck. You will have to have a physical damage insurance policy for that.
A physical damage insurance policy will not only cover you in an accident, but it will also cover you if your truck is damaged by hail, snow, or flooding.
Sometimes a trucker will have to take their vehicle home for the night. It is never a good idea to let them take the trailer home with them.
When they do this, they will not be covered by your company’s liability insurance because they are officially off the clock.
Bobtail insurance will cover them if they should have an accident on the way to their home or back to work in the morning.
General Liability Insurance
Any company with a brick-and-mortar facility needs general liability insurance. General liability insurance will cover you if somebody is injured on your property.
Your workers are covered by workers’ compensation of course. However, if you are like most trucking companies, you will have people coming in and out of your building all day long.
If they slip and fall due to a lack of maintenance, you will have to pay their hospital bills.
Making sure employees and the general public are safe is a major part of a trucking company’s responsibility. Click here for more information about truck insurance.