Being their own boss and setting the hours of working is one of the key reasons why many drivers choose to be owner-operators. However, many factors come into play to make this endeavor successful, out of which obtaining adequate truck insurance is among the most important ones.
You are a self-employed trucker who needs to protect your business against various risks on the road. Whether you are working on your own authority or running under a lease, a few coverages should be part of your policy to carry out operations smoothly. Some coverages are minimum requirements and state mandated for truckers.
A few coverages are a requirement and some are recommended. As an owner-operator, you should be aware of all these truck insurance coverages to invest in the best, and give your operations a robust layer of safety. In this post, we will navigate you through some of the essential and optional coverages that you should opt for. Depending on your risk exposure and needs, you can pick what suits you the best. Let’s begin!
What type of insurance coverage do owner-operators need?
To get the best coverage for your trucking business, here are some policies that you will need to operate seamlessly on the road. Go through each and pick what suits your requirement.
1. General Liability Insurance
General liability insurance is not a legal requirement in most states but in a few areas, this coverage is mandatory to include in the driving license, especially for construction contractors. This coverage not only protects your employee’s or drivers’ actions operating on other party premises -but also offers the much-needed peace of mind as an owner-operator.
This policy covers expenses of bodily injury or property damage to other people in an accident while loading docks. Thistruck insurancecoverage also includes mistakes in loading shipments. Although it is not mandatory coverage, obtaining it is still a good idea for owner-operators.
Benefits of General liability coverage for owner-operators:
- Protection against unfortunate incidents.
- Makes you a credible brand.
- Eliminates the fear of physical injury claims.
- Safeguards your employee’s or drivers’ actions.
- Pays for property damage and physical injuries of the third party.
2. Primary Liability
As per federal and state regulations, drivers need to carry primary liability coverage even for the leased units. This coverage protects bodily injury and property damage caused to a third party in a crash or other mishap while operating on the road. It pays for the injured party’s medical bills followed by a bodily injury in an accident.
Benefits of Primary liability coverage for owner-operators:
- Protects against financial obligations that occur after accidents.
- Allow you to adhere to the law.
- Pays hefty medical bills for the third party who suffers bodily injury in an incident.
- Projects you as a reliable trucking company.
3. Physical Damage
Unlike primary liability coverage which protects only third parties, the physical damage policy pays for own truck damages in the event of an accident. This policy covers trucks and trailers against damages arising out of theft, natural disasters, vandalism, and collision. Additionally, if your truck becomes irreparable, this policy gets it replaced. However, the cost of the truck and its equipment determines its premium.
This coverage comes in two types i.e. collision and comprehensive. Collison covers losses in the event of a crash or bumping with another vehicle. Whereas comprehensive coverage protects your vehicle against fire, vandalism, explosion, natural calamities, animal hits, etc.
Benefits of physical damage coverage for owner-operators:
- Reimburses for all the losses and damages to own truck.
- Pays for the losses no matter who was at fault in the accident.
- Pays for the cost of repairing your damaged vehicle.
- Replace your truck if it gets badly totaled or attains beyond reparable condition.
4. Non-trucking Liability (Bobtail)
Whether you call it bobtail or non-trucking liability, this policy covers the risks leading to damages when the truck is operated for personal motives or is of dispatch. However, it does not protect drivers who use the truck for commercial purposes, drive it for another trucking company, or pull a trailer.
If you suffer any type of vehicle damage while carrying out non-commercial activities, you get reimbursed for the loss.
Benefits of non-trucking liability coverage for owner-operators:
- Pays for the damages to the vehicle during off-dispatch or while using it for personal motives.
- Offers peace of mind when you use your truck for personal as well as commercial activities.
- Can use the truck for personal use without much worry.
5. Motor Truck Cargo insurance
Cargo is a vital part of any trucking business because they need to ensure a smooth haul without minute damage. So, if unexpected circumstances such as theft, vandalism, fire, explosion, and natural disasters lead to cargo loss or damage, motor truck cargo insurance kicks in. The amount of premium depends on the cargo type.
You are solely responsible for hauling and delivering the cargo in its original condition. However, roads are unexpected and anything can happen during the haul. So, protecting it with cargo insurance is the right move.
Benefits of motor truck cargo insurance for owner-operators:
- Protects the shipment against various damages including theft, fire, explosion, vandalism, etc.
- Increase your reliability for cargo delivery on various points.
- Pays for the loss of the cargo.
6. Trailer interchange
Whether you use a rented trailer or own it, trailer interchange is essential coverage for you. This insurance protects the insured from damage to the trailer when pulled. This policy also covers the insured trailer against vandalism, fire, theft, explosion, or collision.
Benefits of trailer interchange coverage for owner-operators:
- Covers the trailer damages while loading and unloading cargo.
- Protects against events like fire, theft, vandalism, explosion, etc. that lead to physical damage to the trailer.
- Pays for all the trailer damages suffered in an incident.
- Maintains your company’s reputation.
7. Reefer Breakdown Coverage
Reefer breakdown coverage is beneficial for drivers owning refrigerated trucks. This coverage pays for the cost of lost cargo due to refrigeration breakdown, spoilage, etc. It also covers shipment damages in the event of a collision. However, some insurance has a few exclusions for certain products like seafood, frozen food, or tobacco. So, check all-inclusive and exclusive before signing up for it.
Benefits of reefer breakdown coverage for owner-operators:
- Protects you from financial obligations after cargo loss.
- Covers the cargo which gets damaged when the refrigerator doesn’t work or suffers a mechanical breakdown.
- Protection against fluctuation of temperature.
- Pays for the lost cargo due to spoilage, loss, damage, etc. followed by reefer breakdown.
8. Medical Payment
Medical payment coverage reimburses medical bills you incur when your driver and passengers get injured in an accident. The cost of medicines and other medical treatments is very expensive. If you don’t want to pay this expense out of your pocket, you need to take this coverage unfailingly. Remember, medical payment coverage pays for medical bills only when the accident happens while operating the truck.
Benefits of medical payment coverage for owner-operators:
- Covers you, your drivers, and other passengers.
- Pays for the medical bills in the event of accidents.
- Protects you whether you were at fault or not.
9. Uninsured/Underinsured Motorist
There is a high possibility that the driver that causes property damage, physical injury, or both to you and your truck doesn’t have adequate liability coverage to pay for your loss.
Here, uninsured/underinsured motorist coverage proves to be very helpful as it will pay for your injury and property damage when the person who’s at fault has no or less liability coverage. This coverage is very useful in a hit and run cases.
Benefits of uninsured/underinsured motorist coverage for owner-operators:
- Covers the action of the driver who doesn’t carry liability coverage or the limit of the policy is inadequate to pay for the medical bill.
- Best for hit-and-run cases.
- Eliminates out-of-pocket expenses.
10. Rental Reimbursement with Downtime coverage
Rental reimbursement with downtime coverage proves useful when your truck gets totaled and takes time to get back into the right shape. To survive this downtime, this coverage pays for the rental cost of the truck you use until your own gets fully repaired.
This coverage also pays for the daily transportation expense you incur in the absence of your own truck.
Benefits of rental reimbursement with downtime coverage for owner-operators:
- Pays for the cost of renting a vehicle or truck.
- Keeps your operation running even after getting hit by the incident.
- Inexpensive coverage costs between $25 to $100 annually.
To Conclude
As an owner-operator, your insurance requirement will depend on whether you are working on a lease or running a business under your own authority.
If you are working under a permanent lease, then coverages like primary liability, medical payments, physical damage, and non-trucking liability are right for you. Whereas if you are working under your own authority, then motor truck cargo insurance, general liability, and physical damage are the right coverages to opt for.
We hope you have learned enough about all types of essential coverages that you need as an owner-operator. First, understand your requirements and the level of risk exposure, then pick the right policy to protect your investment in the best way.
Meta Description: Have you just started your journey as an owner-operator? Learn all types of insurance coverage for truck owner-operators that are vital for smooth operations.
My name is Sardar Ayaz a professional content writer and SEO expert having Proven record of excellent writing demonstrated in a professional portfolio Impeccable grasp of the English language, including idioms and current trends in slang and expressions. I have ability to work independently with little or no daily supervision with strong interpersonal skills and willingness to communicate with clients, colleagues, and management.
I can produce well-researched content for publication online and in print, organize writing schedules to complete drafts of content or finished projects within deadlines. I have 12 years’ experience to develop related content for multiple platforms, such as websites, email marketing, product descriptions, videos, and blogs.
I use search engine optimization (SEO) strategies in writing to maximize the online visibility of a website in search results