6 Types of Insurance Coverage for Truck Owner-Operators

The trucking business is considered one of the risky as well as rewarding businesses to work. This is the reason why many truckers dream of starting their own business and earning good bucks. But before jumping into this earning category, there are many considerations to take care of. And having adequate owner-operators insurance is the most important one.

Being a self-employed truck handler, you need to completely protect your business to ply freely on roads. Whether you are operating your authority or working under lease, you should consider a few coverages as a part of your trucking business. Even some truck insurances are the bare minimum required to run on roads and some are mandated by Law too. 

From the below-given types of insurance coverage for truck owner-operators, some are required and some are recommended. Being a truck owner-operator, you need to know about all truck insurance in detail to choose the best to invest. In short, such coverage provides an extra layer of protection to your trucking business. 

So, let’s navigate through some of the needed and optional coverages that you should consider!

What kind of insurance coverage do truck owner-operators need?

#1 Primary Liability

Primary Liability insurance is one of the coverage that is required by Federal and State regulations even for leased vehicles. It covers bodily injury and property damage done to the third party in case of any unfortunate accident. It pays for the medical payments of the injured party. 

Some important points to know about Primary Liability

• It will protect you against any monetary obligation in any accident.
• Saves you from the penalties or fines as per Law.
• If the third party suffers bodily injury in the accident, it covers their medical bills. 

#2 General Liability Insurance

Although general liability insurance is not required by Law, in some regions, it is essential to include it on the driving licenses. Construction contractors especially need such kind of insurance to include on their driving licenses. 

This insurance is much needed for the owner-operators as it protects their drivers or employees’ actions on the other party’s premises. This policy covers bodily injury or property damage to the other persons involved in the accident. This policy also includes mistakes done while loading the docks. 

Some important points to know about General Liability Insurance

• If you opt for this policy, there is no fear of physical damage claims.
• You can pay for property damage and physical injuries of the third party. 
• Most importantly it protects your drivers’ or employees’ actions.

#3 Physical Damage

The physical damage cover gives you protection against your truck damages, unlike primary liability which pays for third-party only. This coverage will cover your vehicles against damage in natural disasters, theft, vandalism, or collision. 

If in any case, your vehicle is poorly damaged and is irreparable, you can replace it too under this policy. The premium amount is decided as per the condition of the truck and its equipment. 

Some important points to know about Physical Damage

• The coverage has two parts: Collision and Comprehensive. Collision coverage covers the losses done in any crash or bumping with another vehicle. On the other hand, comprehensive covers the losses done by fire, vandalism, explosions, natural calamity, etc. 
• It will cover all the losses no matter who is at mistake in an accident. 
• It helps in the replacement of trucks in case of irreparable trucks. 

#4 Bobtail or Non-trucking Liability

Bobtail policy covers your truck when it is damaged while using it for personal reasons. However, it doesn’t protect the drivers who use the truck for commercial work or use it for pulling a trailer. 

So, if you are facing any sort of vehicle damage used for non-commercial purposes, you can get protection with a non-trucking liability policy. 

Some important points to know about Non-trucking Liability

• If you want to use the truck for some personal work after working hours, you can do it without any tension.
• It will pay for the damages done during off-dispatch, or while using it for personal motives. 

#5 Motor Truck Cargo Insurance

Cargo is one of the crucial parts of any transportation business as they need to be hauled without any damage. So, in unwanted situations like theft, fire, vandalism, or natural disaster, motor truck cargo insurance comes in. The premium depends completely on the type of cargo to be hauled.

Some important points to know about Motor Truck Cargo Insurance

• It covers all kinds of shipments against any damage.
• You can hassle freely transport any sort of cargo. 
• It will pay for any cargo loss.  

#6 Trailer Interchange

Trailer Interchange is a needed coverage when you use a trailer whether leased or owned. It will protect the trailer while pulling in case of theft, accident, vandalism, collision, etc. 

Some important points to know about Trailer Interchange

• If your trailer suffered any kind of damage in the accident, it will cover all the expenses.
• It covers the trailer damage while loading and unloading the cargo. 
• If your trailer gets damaged in any situation like vandalism, theft, or fire, the policy will take up all the expenses for you. 

Now you have read the best 6 types of commercial truck insurance for owner-operators, but how will you go for the needed ones? 

No worries, here are some essential things to consider when buying owner-operator insurance!

The things to consider while buying owner-operator insurance

Having the right commercial truck insurance for your company is the first thing you require to ply carefreely on roads. For instance, a policy like primary liability is mandatory by law and also protects other people on the road. However, such a policy only safeguards third parties. That’s why owner-operator insurance is here to protect you, your business, and your drivers. Here are some necessary points to take into consideration before buying owner-operator insurance. 

• Consider the type of policy you need

The very first and most important thing to consider is understanding the type of policy you need for your transportation business. For this, always opt for a policy as per your truck type and model. 

• Check the monetary strength of the insurer

One of the most essential assessing factors before purchasing a policy is to know the financial strength of the insurance company. You can check for the history of the insurance company and the percentage rate of claims settlements. If the insurer has good financial strength, you may not face any issues while claiming. 

• Always buy the policy from the credible insurance provider

Whenever you search for an owner-operator insurance provider, you will see numerous options of insurance providers. And surprisingly, you will notice, all the claims are good enough. But here comes the main part of choosing the policy wisely. 

So, try to choose an insurer who is good at suggesting the right policy as per the type of trucks you own. Do proper research about the insurance provider including their reviews, feedback, and their market image. 

• Go for auto deduction

If you want a hassle-free insurance journey to smoothly run your business, there is not even a single chance to skip the premium. If you forget to pay for any monthly installment, you are breaking the clause. Your trucking business needs ample time of yours, and this occupancy might lead to making the payment on time. That’s why auto deduction is the solution to making payments on time. 

• Read the complete policy carefully

Whenever you opt for any type of owner-operator insurance policy, you should read all the inclusions and exclusions carefully. Check the complete policy details carefully to help you to understand the clauses. 

And if you feel something is doubtful, ask questions from the insurance provider before putting your money into purchasing the policy. 

• Compare, compare, and compare

As there are many options available for insurers in the market, getting confused is obvious. So, try to shop around. This will help you to figure out the best insurance provider as per your requirements. Don’t just fall for the first policy that you liked, instead do a deep comparison to fetch the best deal for you. 

• Don’t fall for cheap policies

Comparatively cheap policies available in the market can be a trap. So, don’t get swayed by the lower premiums. Although the cost is an important factor that can affect your overall budget of the business, the cheapest offers are not the best ones sometimes. Try to choose a reasonable price policy that covers all your business requirements.

Summing Up: Choose the best owner-operators insurance!

The insurance requirement of any owner-operator largely depends on whether your running own authority or working under the lease. Apart from the given types of insurance coverage, there are some other essential types too. Like, Rental reimbursement, Uninsured/underinsured motorist, Medical Payment, or Reefer Breakdown coverage, etc.  

For the permanent lease option, one should have coverage like primary liability, medical payments, bobtail, and physical damage. On the other hand, if you are working under your authority, then go for motor truck cargo, general liability, and physical damage coverage. 

We have presented the best types of owner-operators insurance coverage that one can need to protect the business. You should understand the business requirements first, and then the level of risk associated with it. And then choose the required policy to protect your trucking business and don’t forget to consider the given points. 

Hope you find this blog helpful!