What type of insurance do you need for a trucking company?

February 23, 2023 Commercial Truck Insurance

If you are an owner-operator or have a company dedicated to commercial transportation, you must know the mandatory and complementary insurance coverages to operate. Pay attention and take note of each one.

The trucking industry is the backbone of the American economy. Therefore, if you work in this field, you must know what insurance your transportation company must have to travel on the road safely and with peace of mind, avoiding inconveniences such as fines due to infractions.

What insurance to buy when you create a trucking company?

The only mandatory insurance policy the law requests is the CSL (Combined Single Limit), also known as Liability (Protection to third parties). The rest of the insurance coverages are complementary. In the case of the MTC (Motor Truck Cargo), it is usually necessary because all the companies that deliver the loads (Brokers) require it; this means that if a person has a type of business in which a Broker is not involved, the MTC is optional.

 

Complementary insurance

 

  • Motor Truck Cargo

The commodities you transport in your truck must have cargo insurance to protect them in case of damage. You must know that depending on the items you haul, the value of the coverage may vary. Coverages of 100,000 dollars are commonly required. For example, electronic devices may require a greater rate, as it is a high-value cargo, only in specific cases such as sand or gravel, motor truck cargo insurance is not required.

 

  • Physical Damage

This coverage pays for physical damage and repairs to a commercial truck in different scenarios, such as the following. The value covered by the vehicle is the one determined in the policy.

-Vandalism
-Collision
-Theft
-Natural disasters

 

  • Bobtail

This coverage is also known as non-trucking liability. It applies when the driver is not driving for business but for personal reasons. Some situations where the coverage is valid are, for example, when the driver must take his unit to the workshop for inspection and suffers an accident; the driver takes his truck from the dealer; after a long trip, the truck driver arrives at the Truck Stop, leaves the trailer and goes in his power unit to make purchases at a supermarket, going to the supermarket he suffers an accident, in these cases, the Bobtail coverage covers the damage to the truck.

 

There are specific scenarios in which this coverage is no longer valid, for example: when the truck is used to tow a trailer or to earn money outside of your official job, and you have an accident; in this case, you lose coverage.

 

  • Trailer Interchange

This insurance covers physical damage to trailers that you do not own. The coverage applies in collision, theft, fire, explosion, or vandalism. An example of this is when Amazon provides cargo to customers using the company’s trailers, that is, the customer only uses the power unit (their truck). Amazon provides cargo and the trailer, so Amazon requests Trailer Interchange coverage to protect their trailers.

 

  • Health insurance

Health insurance is vital since it covers all medical expenses arising from an accident that affects the driver. You must have it as a precaution since no one is exempt from suffering a severe altercation while driving, especially if you are a Trucker and spend most of your time on the road.

 

  • Life insurance

Having life insurance allows you to guarantee the well-being of your family in the event of disability or death due to a road accident.


In summary, 

Suppose you have a trucking company or are considering starting one. In that case, it is essential to know the importance of acquiring these insurances according to the type of truck you drive. Remember that the security and prosperity of your business depend on your responsibility and commitment to the trucking industry regulations.

Preventty helps you adapt your business and keep the necessary trucking insurance up to date so that you can work with all the requirements and documents up to date.