Trucks are the backbone of U.S. commerce. In 2016, 3.5 million heavy-duty trucks carried more than 70% of the country’s freight. In total, trucking employs 7.3 million people and moves 10.5 billion tons of goods each year.
With so many trucks on the road, the Federal Motor Carrier Safety Administration (FMCSA) has strict rules about insurance coverage. Freight trucks are heavy, capable of causing expensive damage, and three times more likely to be stolen than passenger vehicles. Plus, they’re full of valuable goods.
No Insurance, No Authorization
Without proper insurance, trucks can’t roll. The FMCSA, which issues permits you need to conduct trucking business, won’t issue operating authority without proof of liability and cargo insurance. The exact coverages depend on the type of freighter and what it carries.
Hazardous materials carriers, for example, are subject to stricter rules and higher levels of insurance. This is also true of freight haulers that carry passengers and expensive or irreplaceable goods.
The goods inside the truck must be covered in the event of damage. This is handled through cargo insurance, which covers property in transit.
If your company delivers anything, cargo insurance is a good idea. But if you transport household goods across state lines, you are required by federal law to have cargo insurance.
States also require additional insurance for certain types of cargo. Trucking companies must stay in constant contact with insurance providers to ensure they’re fully covered under federal and state laws.
Federally-required liability insurance is determined by the weight of the truck and whether it carries hazardous materials. It’s sometimes called public liability insurance because it protects the public in the event of a truck accident.
If a truck carries non-hazardous materials and weighs 10,001 pounds or more, a $750,000 liability policy limit is required. So if a trucker causes an accident that does $500,000 worth of damage to a public roadway, the government will collect from the policy and repair the damage.
For hazardous materials trucks, liability policies must have significantly higher coverages due to the risk and expense of cleaning up hazardous spills. A $5 million policy must be carried at all times for trucks that deliver radioactive materials, explosives, gases, or anything that’s poisonous by inhalation.
Liability policies cover both property damage and bodily injury. If another motorist or a pedestrian has hospital bills as a result of an accident caused by a trucker, the liability policy addresses their bills.
The trucking industry also has some common voluntary coverages. While these aren’t required by legal authorities, they’re an excellent way to protect valuable trucks.
- Physical damage coverage protects trucks against natural disasters like fires and floods. It also covers theft, which is a major issue in trucking.
- Non-trucking liability, also called bobtail insurance or deadhead coverage, covers trucks when they’re traveling without a trailer - deadheaded - or they’re off the road for servicing.
Trucking Business Owners, Take Note
If you run a trucking company, you’ll also need other types of insurance to protect your employees and manage long-term risks for your business.
- Property insurance protects your building and parking terminals where trucks may be kept.
- Workers Comp insurance deals with medical costs and disability payments for employees injured on the job.
- Cyber liability insurance covers credit card issues, data breaches, and other cyber attacks.
- Health insurance and employee benefits help you attract the best workers and preserve their health.
If you need help selecting trucking insurance, give us a call at 732-380-0900 or request a quote to get started.