What kind of insurance should a trucking company have?
A Guide to the Different Types of Insurance Required for a Trucking Company
Starting a trucking company can be a challenging and rewarding experience. As a business owner, you need to be aware of the different types of insurance that you need to protect your company, your drivers, and your cargo. In this blog post, we'll discuss the different types of insurance that a trucking company should have to operate legally and protect themselves in case of an accident.
Liability Insurance The most important type of insurance that a trucking company should have is liability insurance. This type of insurance protects your company in case of an accident where you or your driver is found to be at fault. Liability insurance covers damages and injuries to other parties involved in the accident. Federal Motor Carrier Safety Administration (FMCSA) requires a minimum liability coverage of $750,000 to $1,000,000 for trucking companies. However, the amount of coverage may vary depending on the type of freight and the number of vehicles in your fleet.
Cargo Insurance Cargo insurance is another essential insurance that a trucking company should have. This insurance protects your cargo in case of theft, fire, or damage during transportation. FMCSA requires cargo insurance of $5,000 for each vehicle and $10,000 for each accident or theft. If you're transporting high-value goods, you may need to get additional cargo insurance to cover the full value of your cargo.
Physical Damage Insurance Physical damage insurance covers damages to your vehicles and equipment in case of an accident, theft, fire, or vandalism. This insurance covers the cost of repairs or replacements of your property. If you have financed your vehicles or equipment, your lender may require you to get physical damage insurance.
Worker's Compensation Insurance Trucking is a high-risk industry, and your drivers are at a high risk of injuries or accidents. Worker's compensation insurance covers medical expenses, lost wages, and rehabilitation costs if your driver gets injured on the job. This insurance protects your company from potential lawsuits by injured employees.
Bobtail Insurance Bobtail insurance provides liability coverage when your driver is operating a commercial vehicle without a trailer. This insurance protects your driver when they are using their truck for personal use or driving an empty trailer. It's essential to have this insurance because your regular liability insurance may not cover accidents that occur when your driver is not hauling any cargo.
As a trucking company owner, having the right insurance coverage is crucial to protect your business, employees, and cargo. Liability, cargo, physical damage, worker's compensation, and bobtail insurance are the main types of insurance that a trucking company should have. By understanding and obtaining the right insurance coverage, you can focus on growing your business with peace of mind that you are protected in case of an accident or theft. Remember to always consult with an insurance agent or broker to understand your insurance options and requirements.