Owner Operator Truck Insurance 101

Owner Operator Commercial Trucker preparing her business

Last Modified: April 27, 2023

What kind of Truck Insurance does an Owner Operator or small Motor Carrier need?

Commercial Truck Insurance for Motor Carriers and Owner Operators is typically broken down into 4 different categories:

  1. Commercial Auto Liability
  2. Physical Damage
  3. Cargo
  4. General Liability

What does each category of truck insurance cover and how does each one protect you?

Let’s start with Commercial Auto Liability

Commercial Auto Liability insuranceYour Commercial Auto Liability is designed to pay for damages to others if you cause an accident while driving your truck.
If it’s unclear who was at fault, then your Commercial Auto Liability also protects you from a possible lawsuit claim against you.
In either case, your insurance company will pay the claim “up to the limits of the coverage you bought.” (You can always be sued for more than the coverage you bought.)
Commercial Auto Liability coverage for Truckers is broken into several forms. It’s based on HOW you are using the vehicle at the time of loss. Let’s break it down to what you need for what you do:

Primary Commercial Auto Liability

Primary Liability is designed for Motor Carriers with their own FMCSA Trucking authority (DOT number). It’s also purchased by Independent Contractor Owner Operators of Cargo Vans and Sprinters who haul for multiple Motor Carriers.
Primary Commercial Liability pays the claim when the insured truck and driver cause an accident while operating for business use.

Non-Trucking Liability or “NTL”

Non-Trucking Liability or “NTL” is designed for Owner Operators who are under permanent contract lease to one Motor Carrier.
When you’re hauling freight on behalf of that Motor Carrier, they are covering you for the Primary Liability on their policy.
You are then responsible for your own NTL coverage for personal use when you are NOT operating “on behalf of” or “for the benefit of” the Motor Carrier.
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 also been judged by the courts to be “business use” and not an NTL exposure.

Unladen Liability

Unladen Liability is 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.
If the truck is without a load, it is “Unladen.”
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, be sure to read your Motor Carrier’s requirements.

How much Commercial Auto Liability truck insurance does an Owner Operator need?

Cargo Vans and Sprinters hauling freight across state lines are required to carry a minimum of $300,000 Commercial Auto Liability.
Larger trucks and Hot Shots are required to carry a minimum of $750,000 Commercial Auto Liability.
However, industry standard for small or large trucks is usually $1,000,000 as most customers now require this limit.
The cost of Commercial Auto Liability for Motor Carriers and Owner Operators varies widely due to the different forms, type of truck, driving history etc, but here are 10 Quick Tips to Lower your Truck Insurance Premium.

Second Category of Owner Op Truck Insurance is Physical Damage… or “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 overturns.
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 the value of your commercial truck calculated in a Physical Damage insurance claim?

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.
Several insurance providers offer “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 2 years.

How much does an Owner Operator pay for Physical Damage Insurance on a Commercial Truck?

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.

Third Category of Owner Op Truck Insurance is Motor Truck Cargo

The Ccrgo in the back of your truck requires its own 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.

How much Motor Truck Cargo insurance coverage does a Motor Carrier or Independent Owner Operator 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.)

Many Motor Truck Cargo policies completely exclude coverage for these 4 reasons:

  1. Cargo is in the custody of any other carrier
  2. Cargo is in shipping container
  3. Cargo is unattended at any time
  4. 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.

The fourth and often overlooked category of truck insurance for Motor Carriers and Owner Operators is General Liability.

In addition to the risks of operating a truck, trucking companies face the same liabilities as any other business.
General Liability covers the most common types of third-party injuries and accidents related to customer injuries and property damage…and more.

Here are some of most common ways you can be sued as an Owner Operator or Motor Carrier:

  • 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 for an Owner Operator cost?

General Liability is affordable and effective coverage that runs between $750 and $1,000 per year.
Watch our fun Understand Commercial Truck Liability videos and read our take on The Best State for Truck Insurance.

CIS Trucker Turtle explains Truck Insurance
CIS Trucker Turtle explains Truck Insurance


  • 2002 Founder and CEO of Commercial Insurance Solutions, Inc., Shelly Benisch specializes in providing Commercial Truck Insurance for owner operators and small motor carriers. Both CIS and TRS certified, She also writes a free educational trucking insurance advice blog dedicated to the little guy.

  • Executive Director of Commercial Insurance Solutions, Inc., Christina Cummings leads her team in providing the best Truck Insurance with the best rates for Owner Operators and small Motor Carriers. Christina is TRS certified as a Transportation Risk Specialist. She is your "go to" person at CIS with questions, tips and networking opportunities in our trucking and expediting community.

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