Commercial Truck Insurance 101 for Motor Carriers and Owner Operators starts with four key categories of coverage: Commercial Auto Liability, Physical Damage, Motor Truck Cargo, and Truckers General Liability.
Quickly learn how each trucking insurance coverage protects your small business.
What Are the Main Coverage Categories of Truck Insurance?
Commercial Truck Insurance, also known as Commercial Transport Insurance, includes four essential categories for Motor Carriers and Owner Operators: Commercial Auto Liability, Physical Damage, Motor Truck Cargo, and Truckers General Liability.
Each category protects your small trucking business in unique ways, covering risks from accidents to cargo damage and more.
Whether you’re a new Independent Owner Operator or an established Motor Carrier, understanding these categories ensures you’re protected on the road.
What does each category of truck insurance cover and how does each one protect you?
Let’s start with the first category of Trucking Insurance, Commercial Auto Liability.
What Does Commercial Auto Liability Truck Insurance Cover?
Commercial Auto Liability is a key part of your whole Commercial Transport Insurance package.
It’s what protects you if you accidentally cause damage or injure someone while driving your truck.
Here’s how it works: if you hit someone or something, your Commercial Auto Liability kicks in to cover the damages or injuries caused.
And if there’s any confusion about who’s at fault, it also has your back against potential lawsuits.
Your insurance company will handle claims up to the coverage limit you chose.
Here’s the deal—this coverage isn’t just a legal requirement to drive your truck, it’s also what gives you peace of mind every time you hit the road!
What Are the Types of Commercial Auto Liability for Truckers?
Commercial Auto Liability within commercial transporter insurance includes several forms tailored to how you use your truck:
- Primary Commercial Auto Liability for 24/7 coverage
- Non-Trucking Liability (NTL) for off-duty incidents
- Unladen Liability for completely empty trucks
- Bobtail Liability for tractors without trailers
Primary Commercial Auto Liability
- This is mandatory coverage for Motor Carriers with their own DOT Operating Authority
- Coverage pays Bodily Injury and Property Damage claims to others when the insured truck and driver cause an accident
Non-Trucking Liability – NTL
- Designed for Independent Owner Operators who are under permanent contract lease to one Motor Carrier
- This coverage pays the claim when the Owner Operator causes an accident while NOT operating on behalf of or for the benefit of the Motor Carrier
- When you’re hauling freight on behalf of that Motor Carrier, they are covering you for the Primary Commercial Auto Liability on their policy
- Non-Trucking Liability can be confusing because the words ‘operating on behalf’ or ‘for the benefit of the Motor Carrier’ can be ambiguous
- For example, taking yourself off dispatch does not mean you are automatically in NTL territory
- Other examples of trip deviations or mechanical work have been judged by the courts to be business use and not an NTL exposure
Unladen Liability
- If your truck is completely without a load, it is considered Unladen
- Also designed for Owner Operators leased on to one Motor Carrier
- Coverage is straightforward in comparison to NTL. It clearly states that if the Owner Operator has a loaded truck, then it is under dispatch for business use and the Motor Carrier’s Primary Policy pays the claim
- Unladen Owner Operator coverage is far broader than NTL, but more difficult to obtain and considerably more expensive than NTL
- Your Motor Carrier’s contract will be clear if this coverage is required because they often have an inhouse insurance provider program
Bobtail Liability
- Bobtail coverage is designed to pay a liability claim when a Tractor is without a trailer.
- Most contracts have been updated from Bobtail to NTL, but be sure to read your Motor Carrier’s requirements.
How Much Commercial Auto Liability Do Truckers Need?
Cargo Vans and Sprinters hauling freight across state lines are required by FMCSA to carry a minimum of $300,000 Commercial Auto Liability
Larger trucks and Hot Shots are required by FMCSA to carry a minimum of $750,000 Commercial Auto Liability
FMCSA is the Federal Motor Carrier Safety Administration.
When it comes to insurance for small commercial vans or larger trucks, $1,000,000 is the standard coverage these days.
Why?
Because most customers and brokers now expect that level of protection for all loads.
The cost of Commercial Auto Liability for Motor Carriers and Owner Operators varies greatly.
It all depends on things like the type of truck, your driving history, and a few other factors.
Work with a transportation insurance expert who gets what you do and makes sure you’re covered the right way with the lowest premium.
Right now, both Progressive and GEICO are competing to work with new trucking startups, and at CIS we’ll get you quotes from them and others.
Once you get your Commercial Auto Liability, everything else falls into place after that:)
You can get a quick idea of your premium by starting a GEICO Commercial Truck Insurance quote online or Call CIS (330) 864-1511. #CISDoesThat
Read more in Who has the Best Commercial Truck Insurance?
Now to the Second Category of Commercial Truck Insurance…
What Does Physical Damage Insurance Cover for Trucks?
Physical Damage, or “Phys Dam,” a key aspect of commercial transporter insurance because it covers your truck’s Comprehensive and Collision damages.
Collision protects against damage from hitting objects, while Comprehensive covers fire, theft, flood, vandalism, windstorms, or animal strikes.
This insurance is vital for Owner Operators and Motor Carriers, ensuring your truck or commercial van is protected.
The Stated Amount sets the maximum claim payout up to Actual Cash Value.
Read on for more about Stated Amount.
Here’s a little cheat sheet on Physical Damage for your truck:
Physical Damage – Phys Dam
- Physical Damage or “Phys Dam” is the Comprehensive and Collision Insurance Coverage on your truck
- Collision insurance covers your truck if it is damaged by hitting something or flips over
- Comprehensive (Comp) is the insurance that covers just about anything else that can happen to your truck like fire, theft, flood, vandalism, windstorm or animal hit
How Is a Truck’s Value Calculated for Physical Damage?
The Stated Amount is the maximum amount your insurance provider will pay ‘UP to’ in a claim
The duty to submit the true Stated Amount based on market value is on the Owner Operator or Motor Carrier.
Some insurance providers like Progressive include “Financed Value Coverage” which will pay the actual cash value of your loan up to your Stated Amount.
Be sure to stay on top of your Stated Amount because used truck values have been wildly fluctuating for the past several years.
Here’s a blog on Why your Commercial Truck may be Under Insured
How Much Does Physical Damage Insurance Cost Truckers?
Like all insurance, your credit greatly impacts your cost for Physical Damage.
Rates for the Physical Damage portion of your commercial truck insurance can vary as low as 1.7% per thousand up to 4.5% per thousand of your vehicle’s value.
So if the Stated Amount on your truck is $100,000 the Phys Dam portion of your insurance would run between $1,700 and $4,500 per year.
Also, know that your driving record tends to carry a large impact on the Collision portion of your Phys Dam rate, especially on new units.
Our Transportation Coverage Specialists are here to help you make sense of how the Stated Amount on your truck affects your policy.
Got questions about stated amount and lowering your truck premium? Give us a call—we’d love to chat and help you out!
CIS (330) 864-1511 #CISDoesThat
What Does Motor Truck Cargo Insurance Cover for Truckers?
Motor Truck Cargo is the third leg in your Commercial Transport Insurance package, covering the freight you haul in your truck.
It requires its own separate type of insurance coverage based on what commodities you’re hauling.
- Most Motor Truck Cargo Policies insure the freight for the obvious exposures of theft, fire, collision or striking of a load
- Refrigerated Freight (Reefer) coverage can be added to protect cargo damaged by a change in temperature from a sudden and accidental breakdown
- Understand that reefer policies will not cover you in the case of poor maintenance of the unit
Many commodities are excluded unless specifically endorsed back onto a policy.
Typical examples include art, jewelry, precious or semi-precious metals or alloys, money, contraband, prescription pharmaceuticals, tobacco, spirits, explosive or radioactive material, mobile homes…and more.
General freight typically carries $100,000 limits with $1,000 deductibles, though theft or reefer claims may have higher deductibles ($2,500-$5,000).
Many policies also cover debris removal and pollution cleanup.
If you’re planning to haul steel or reefer, it’s worth knowing about some of the limits Motor Truck Cargo policies have when it comes to moisture and wetness.
You can learn more about these coverage limitations at Commercial Truck Cargo Insurance.
How Much Motor Truck Cargo Insurance Do Truckers Need?
Motor Truck Cargo insurance coverage can be purchased at limits as low as $5,000 and as high as $5,000,000, but industry standard for general freight is $100,000.
Typical deductibles for a cargo policy are $1,000.
Theft, reefer and commodities endorsed back onto a policy often carry a $2,500 or $5,000 deductible given the riskier exposure.
Many policies also include debris removal and pollution cleanup. (Think of your overturned unit with cargo scattered across the highway.)
What Are Common Exclusions in Motor Truck Cargo Insurance?
- Cargo is in the custody of any other carrier
- Cargo is in shipping container
- Cargo is unattended at any time
- Cargo is in storage greater than 72 hours
How much does Motor Truck Cargo Insurance cost?
High end commodities can vary widely, but $100,000 for simple General Freight Cargo runs between $500-$1,000 per year. On an account with strong credit, Cargo premium can be as low as $300-$600 per year.
Auto Haulers run closer to $2,000-$2,500 for $100,000, but are sometimes required by their customers to carry up to $250,000 in cargo coverage so the rate will be higher.
No worries! We’ll help you get the correct motor truck cargo for what you do at the very lowest premium.
That’s all we do all day long:)
Start commercial truck insurance quotes online through CIS today or call (330) 864-1511 just to chat. #CISDoesThat
What Does General Liability Insurance Cover for Truckers?
General Liability insurance is the 4th and often overlooked key of your commercial transport insurance package.
It covers truckers for non-driving incidents like third-party injuries, property damage, or customer-related accidents.
It protects against risks such as slip-and-fall claims, negligent hiring lawsuits, or damage to rented premises, ensuring Owner Operators and Motor Carriers aren’t financially liable.
Common claims include loading/unloading mishaps or contractual disputes.
What Are Common General Liability Risks for Truckers?
- Loading and unloading (…when “helping out” on a delivery)
- Contractual Liability & Lease Agreements (MC – OO contracts)
- Negligent hiring (…should have known the driver was bad news…)
- Damage to premises rented to you (…motel room damage)
- Slip & Fall (…easy $5,000 in Med Pay for claimers)
- Contributory Negligence (…Good Samaritan & no good deed…)
- Vicarious liability (…you can be sued for just about anything)
- Self defense suits for protecting other people and property
- Libel & Slander (Employee’s trash talk about a competitor:)
How Much Does General Liability Insurance Cost Truckers?
General Liability insurance, part of commercial transport insurance, costs between $750 and $1,000 per year for Owner Operators and Motor Carriers, offering affordable protection against non-driving risks like customer injuries or property damage.
This coverage is crucial for trucking businesses facing liabilities such as slip-and-fall claims or negligent hiring lawsuits.
Rates depend on factors like business size and risk exposure, but it’s an effective safeguard for unexpected incidents.
Request commercial truck insurance quotes online through CIS today or call 330-864-1511 for tailored coverage from GEICO, Progressive, and more.
15 minutes could save you BIG $$$ on your Commercial Truck Insurance! #CISDoesThat
