December 8, 2022 #1 Local News, Forum, Information and Event Source for Venice Beach, California.

How Do I Know What Types of Commercial Trucking Insurance Coverage I Need?

Running a small trucking company is expensive. You must comply with many rules set forth by the Federal Motor Carriers Safety Administration. You’ll have to find a base of operations, find a company to finance your trucks, and hire drivers. You’ll also have to purchase several insurance policies.

Liability insurance is required by the FMCSA. If your trucks weigh over 10,000 pounds and your drivers cross state lines, you’ll need insurance of $750,000 to $5,000,000. The exact amount depends upon the type of cargo you’re carrying. If you’re carrying non-hazardous freight moved only in a vehicle that weighs under 10,001 pounds, you’ll need at least $300,000 of insurance.

If you transport household goods, you must get at least $5000 of cargo insurance for each accident and $10,000 for each occurrence. You’re likely to need far more insurance than the government requires. There are a few policies every trucking company should have.

Accident Liability Insurance

When a semi-truck is in an accident, it can cause millions of dollars in damage. If your driver causes an accident, you’ll need plenty of liability insurance to pay for it. Liability insurance covers any damage you cause to another driver’s vehicle. It also covers the medical bills and funeral expenses of anyone that you injure.

Liability insurance covers damage that you do to the road itself or any buildings and structures around the scene of the accident. A trucking accident may cause environmental harm that lasts for a long time. If this happens, you may owe compensation to the community in which the accident took place.

Cargo Insurance

According to Simplex Group, cargo insurance is almost as important as liability insurance. Your clients rely on you to get their products where they’re going and safely. Your contracts with each client will specify the amount of insurance you must have.

Most clients won’t do business with you if you cannot cover the cost of their cargo, transportation, and the profits they’ll lose if their products do not get where they’re going.

Not only can products be damaged by accidents, but they can be damaged by weather conditions if your truck isn’t properly insulated or if loaded incorrectly. Products that were not packed properly can also be damaged.

Although modern trucks are secure, theft still happens. A driver might forget to lock the back of the vehicle, or the thief may have very sophisticated equipment. Although it may sound like something out of a movie, highway piracy is not unheard of. Unless your driver knows how to swashbuckler, you want to insure your cargo from theft. 

It’s important to have enough insurance to cover the products you carry if they’re damaged or stolen. 

Physical Damage Insurance

If your driver’s in an accident that is no fault of their own, the insurance company of the driver who caused the accident will be responsible for the damage to your vehicle. It’ll also pay for your driver’s medical bills.

If your driver causes an accident, your worker’s compensation insurance should pay for their medical bills but not the repair of the truck. Physical damage insurance will cover the cost of their damaged truck.

Trucks can be damaged even if you’re not in an accident. They can be damaged by road and weather conditions. Some people also vandalize trucks and other vehicles. It’s important to be able to repair anything wrong with a truck. 

Reefer Insurance

Owning and operating a refrigerated truck can be very profitable. However, if the refrigeration fails, you can have a big mess on your hands. If the food or medicine you’re transporting arrives at its destination spoiled, you’ll have to compensate your clients and their customers. You’ll need reefer insurance to cover anything wrong with this type of truck.

Reefer insurance will cover cargo and physical damage. Ordinary cargo and physical damage insurance may not be enough.

General Liability Insurance

Every trucking company needs to have liability insurance. It’ll cover you if a visitor to your business is injured on your property. You should ask for liability insurance to be included in your insurance bundle rather than purchasing it separately.

Trucking is an exciting and challenging industry in which to do business. It can also be a stressful one. If you’re fully insured, you will have one less thing to worry about. 

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