Insurance is not only a safety net for any business, but it is also a requirement by the law. The Federal Motor Carrier Safety Administration (FMCSA), which is the body that governs the trucking industry requires specific shipping and insurance needs from the industry players.
The drivers not only have to prove that they have at least a minimum of primary truck insurance, but the trucks might also need proof of general liability truck insurance. Commercial truck insurance addresses trucking risks, and no matter how many drivers or trucks you have on the road, the insurance will protect your employees, business, and you.
What Is Commercial Trucking Insurance?
Trucking insurance is very important. This is because it provides the coverage that protects shipping companies from incurring costly bills should a truck get involved in an accident. All truck drivers need auto insurance to be able to stay on the road legally, but commercial shipping insurance goes beyond that.
Trucking insurance policies mostly start with primary liability and then include several other insurance covers. As part of the trucking license, trucking companies should have primary liability insurance coverage. This insurance is meant to protect people and property from damages caused by the trucks.
The shipping and insurance package that you decide to get for your company may include different types of coverage. Therefore, to identify the options that are necessary for you, you need to understand each insurance coverage and how it works.
Types of Commercial Trucking Insurance
When it comes to commercial trucking, there are several types of shipping and insurance policies that trucking companies should consider. Your options or premiums will depend on several things like:
- The type of truck your driver is driving
- The cargo
- Your drivers’ experience (including their age and driving record)
- Risks involved
- How far your drivers are driving
- State requirements
- The age and condition of your equipment
Here are some important considerations:
1. Primary Auto Liability Insurance
As we previously mentioned, it is mandatory to have this insurance coverage. Every truck on the road, whether leased or not, must have commercial auto insurance. This insurance will protect you when a third party sustains an injury from an accident.
The insurance also helps to cover lost wages, medical expenses, property damage, including repairs and replacement of other vehicles if the truck driver is at fault, and damages to other properties like buildings. It can also cover legal expenses in extreme cases.
2. General Liability Insurance
In the United States, every state requires general liability insurance. This insurance protects the trucking company should the driver cause damages to property or bodily injury as a result of the typical use of a truck.
This insurance coverage comes in handy when claims are made against a truck driver for the services provided. Whether from the loading to the job site, general liability insurance is essential when it comes to protecting your business against both major and minor incidents like loading mistakes.
3. Physical Damage
Having auto liability is not enough when it comes to shipping and insurance considerations. This is because it does not protect the truck driver or the company. To ensure that you are fully covered, you should also consider the physical damage insurance coverage.
This insurance coverage will help protect your trucks. It covers all costs related to repairs or replacement from damages like vandalism, natural disasters, collisions, and also theft. The cost of replacing the trucks will determine the premiums that you will pay.
Physical damages can include collision and comprehensive coverage. The collision cover will cater to damages the truck sustains when it accidentally runs into something. Comprehensive coverage provides repair and replacement costs that the trucks need when damaged as a result of any other thing that is not necessarily an accident; like vandalism or fire.
4. Cargo Insurance
Shipping and insurance coverage is not only meant for the truck and the drivers, but the cargo being hauled as well. Your customers trust you with transporting their goods safely from one place to another. It is the responsibility of a trucking company to ensure that the cargo gets to its destination safely.
There are several incidences where cargo can either get lost or damaged as a result of an accident. This is where the cargo insurance comes in. The insurance protects the cargo, and therefore, the premiums will depend on the kind of goods being transported.
5. Reefer Breakdown Coverage
If you have refrigerated trucks, then it is necessary to consider getting the reefer breakdown insurance coverage. A refrigerated truck has its unique equipment, and therefore, it is trusted to transport perishable goods.
This insurance covers everything related to a reefer including:
- Lost cargo
- Damage to products as a result of a collision
- Refrigeration breakdown
With the reefer insurance coverage, it is important to note that some insurance companies have several exclusions. Some policies exclude products like seafood, frozen food, or tobacco products. Therefore, make sure you are aware of such exclusions before paying for it.
Other Types of Insurance
- Rental reimbursement
- Trailer interchange
- Medical payment
- Uninsured/Under-insured motorists
While it’s tempting to go for cheap trucking insurance, it may not be able to provide you with the right and complete protection that your business needs.
Take a closer look at what a provider is offering you before buying from them.
Consider These Types of Shipping and Insurance Coverage for Your Trucking Business
Getting the right shipping and insurance coverage is the first step towards protecting your business against unforeseen incidents.
Cheap commercial trucking insurance is very important for any trucking business, whether big or small.
Remember, as your company grows, it goes through several changes, and such changes might affect your insurance needs as well. Ensure that you evaluate your insurance every year to ascertain that you’re still getting maximum protection for your company. To read more, explore our website further.