What Do You Need When You Start a Trucking Company?Posted on Oct 26, 2020
There are plenty of things you need when you start a trucking company. You need trucks, drivers, loading equipment — and customers who want you to move their goods from one location to the next.
You also need an appropriate amount of insurance protection and various coverage types to protect your business, your drivers (and other employees), and the cargo you’re carrying for your clients. It can be a little confusing, and it’s too important not to have the right kind of coverage and insurance protection.
Important Insurance Protections to Consider for Your Trucking Company
Here we will discuss different types of insurance protection you may need, as well as why it’s so important to work with an independent insurance agency who has your best interests in mind.
Truck drivers spend long hours on the road, sometimes in hazardous driving conditions. It’s wise to consider insurance coverages that offer them protection when they’re on the road and away from home, such as mechanical breakdown insurance coverage. This provides assistance with towing, roadside labor, and help with labor for repairs. You’ll need to have health insurance and workers’ compensation insurance.
Rental Reimbursement and Downtime Coverage
Because business keeps on going when you have a truck down for covered losses, you might also need rental reimbursement and downtime coverage to help you get your business rolling while you’re waiting for repairs or replacements for your trucks.
Truck Cargo Insurance and Equipment Breakdown Coverage
Don’t forget the importance of truck cargo insurance as well as insurance coverage for things like equipment breakdown that may help you replace lost cargo if a refrigeration unit, for instance, goes out on your truck – not to mention offering assistance for repairing or replacing the faulty unit. You’ll also need building insurance if you house your trucks in a building.
Your trucking company is a business first and foremost. This means you share some common business insurance needs with most other companies across the country. Odds are good that you have a home base from which your truck deliveries, routes, pickups, etc. are based. This is where you keep your trucks on the rare occasions they aren’t in use.
You probably have trucks, computers, office equipment, maybe even an onsite garage for truck maintenance, and other equipment you need to operate your business, which is why you will need a comprehensive business owner’s policy (BOP).
The BOP is a fairly standard policy for businesses that includes the following types of insurance protection:
- Property insurance. This insurance covers all the equipment mentioned above, plus the buildings where you keep this equipment.
- Business interruption insurance. This offers essential protection when you cannot operate normally due to a covered event (like a fire or hurricane that damages your vehicles, buildings, and other equipment).
- General liability insurance. This doesn’t count all the other types of liability protection you’re going to need. It only applies to general liability, but no business today can afford to operate without this essential insurance protection.
That’s the general business insurance included in your BOP, but only a fraction of what you’re going to need to have sufficient protection for your trucking company.
You’ll also need to provide your drivers and others who work for your trucking company with workers’ compensation insurance.
Commercial Truck Insurance
When you own a trucking company, your entire business is built around the trucks in your fleet. Merchant Maverick suggests that all trucks require a minimum of $750,000 in insurance. That’s in addition to liability coverage, the Federal Motor Carrier Safety Administration (FMCSA) requires ($500,000). Your commercial truck insurance covers you from various incidents, including driver accidents, property damage, and bodily injury. If you carry hazardous materials, you’re required to have at least $5,000,000 in liability coverage.
It’s also a good idea to have an umbrella insurance plan that is sufficient for your comfort zone. One bad accident can easily exceed your other liability protection limits. An umbrella plan will offer additional coverage once you exhaust those limits.
While you need to cover the truck for liability, you also need to cover the truck itself. That means you’ll need comprehensive coverage on the vehicle, collision coverage, property damage coverage, and coverage for uninsured and underinsured motorists. These are standard auto coverages that apply to commercial trucks, like any other commercial vehicle.
You just need a little more protection than the average passenger automobile. You’ll also want to add a bobtail endorsement to your commercial truck insurance so that you have protection for your trucks when they aren’t pulling trailers.
You’ll also need liability protection, and we do an excellent job of breaking down the various types of liability insurance trucking companies need in general in another piece. It provides a detailed list of the types of commercial trucking liability coverage you might need.
Let Ottersted Insurance Agency Help You With Your Commercial Trucking Insurance Needs
As you can see, there’s a lot to remember and know when it comes to buying insurance for your trucking company. Working with an independent insurance agency gives you greater flexibility to customize the insurance to meet your trucking company’s needs.
Because every trucking company is unique in some form or another, it’s important to ensure that you have specific coverage for your business. Working with a reputable agency with a long history can be beneficial in this regard.