Why You Need Commercial Trucking Liability Insurance
Commercial Trucking Liability Insurance is essential because as the saying goes, “You’re liable to get sued.”
Here’s an easy cheat sheet.
Has anyone ever said to you, “You’re liable to get sued”?
What does being “liable” actually mean?
It means it’s likely that you could be legally responsible for damages you may cause.
For example, if you’re driving your truck and cause an accident—whether it’s property damage or personal injury—you’re likely responsible for covering the costs.
That’s where Commercial Truck Liability Insurance comes in to play.
You also carry Liability Insurance to cover your car.
But as an Owner Operator of a Commercial Vehicle, your responsibilities are larger than your personal car insurance.
How Commercial Truck Liability Insurance Works
When you purchase a Commercial Auto Liability policy, you’re betting that a truck accident might happen, while the insurance company is betting that it won’t.
Think of liability insurance as a safety net—you hope you never need it, but it’s critical when you do.
If an accident does occur:
- If you are clearly at fault, your insurance company pays for the damages, up to your coverage limits.
- If fault isn’t clearly established, your insurance may also cover the costs of defending you in court.
Accidents don’t just cost money—they come with lawsuits, stress, and potentially the end of your business.
Why Do You Need Commercial Truck Liability Insurance?
Your state DMV requires certain vehicles to be registered for commercial usage.
If you are hauling freight across state lines for hire, the federal government also requires you to register your vehicle with FMCSA.
Anyone who uses their vehicle to conduct business or make money should read What is the Definition of a Commercial Vehicle.
Vehicles registered for commercial usage require Commercial Auto Insurance.
Types of Commercial Truck Liability Coverage
Commercial truck liability insurance isn’t one-size-fits-all. Different policies provide specific types of coverage depending on how your truck is used and who is responsible for it.
Here’s a cheat sheet of the main types of coverage for Owner Operators hauling freight for hire:
1. Primary Commercial Auto Liability
You will often hear this referred to as simply your “Primary Liability.”
This is the liability you need for 24/7 coverage for damages you could cause while operating your truck.
Anyone working as an Independent Contractor or Motor Carrier with DOT authority are required to carry Primary Commercial Auto Liability.
It not only keeps your business compliant but also protects the public from financial harm caused by trucking accidents.
2. Non-Trucking Liability (NTL)
Non-Trucking Liability, or NTL, is designed for Owner Operators leased to a Motor Carrier.
Under this common arrangement:
- Your Motor Carrier provides primary commercial auto liability insurance when your truck is in business use.
- NTL covers you when you’re driving your truck for personal use only—not for the benefit or on behalf of the Motor Carrier.
However, NTL coverage can be tricky to interpret. Terms like “operating on behalf of” can create gray areas. For instance:
- Taking your truck to get a tire repaired might still be considered “business use,” even if you’re off dispatch and not carrying freight.
- Courts have ruled that trip deviations for personal errands during business use may void NTL coverage.
It’s crucial to understand the limits of this policy to ensure you’re adequately protected.
3. Unladen Liability
Unladen Liability provides broader coverage compared to NTL. It applies when your truck is operating without a load but not actively under dispatch.
- If your truck is loaded, the Motor Carrier’s Primary Liability covers you.
- If your truck is unladen, this coverage kicks in.
Because it offers broader protection, unladen liability is typically more expensive than NTL.
So if your Motor Carrier requires you to carry Unladen Liability, understand that this policy will cost you more than an NTL policy.
Read your contract.
4. Bobtail Liability
Bobtail Liability specifically covers trucks operating without a trailer attached. While less common today—most policies have transitioned to NTL—Bobtail Liability is still a term you might hear in the industry. If someone says “Bobtail”, they usually mean “NTL.”
5. General Liability
General Liability is often confused with the Primary Liability listed above.
GL is not mandatory, it is additional coverage a small business owner can purchase to insure for events that can cause damage outside of operating their truck.
The most common General Liability claim is for damages caused to a facility or people during loading and unloading of freight.
Here’s more on Why You Need Truckers General Liability in addition to Primary Liability.
Commercial Auto Insurance Coverage Limits for Truckers
If you’re hauling freight across state lines, the Federal Motor Carrier Safety Administration (FMCSA) mandates minimum liability coverage to protect the public from uninsured or underinsured truckers.
Commercial Auto Liability Insurance Requirements for vehicles hauling freight across state lines for hire:
Cargo Van and Sprinter Insurance minimum requirements are $300,000 CSL
HotShot Insurance for One Ton Duallys minimum requirements are $750,000 CSL
Larger units like Box Trucks, Straight Trucks and Semis are also required to carry a minimum of $750,000 CSL
CSL = Combined Single Limits
If you’re NOT hauling freight across state lines, your state still has their own requirements.
Check out our CIS Commercial Truck Insurance Blog for Owner Operators for your states’ requirements.
For Owner Operators leased on and operating under a Motor Carrier’s authority, your contract should specify the liability limits they require you to maintain for NTL.
For Independent Contractors with their own authority, it’s critical to ensure you meet FMCSA requirements—and consider purchasing higher limits for additional protection.
Regardless of vehicle size, it’s important to know that industry standard for most trucking operations isn’t $300,000 or even $750,000 – but $1,000,000 Commercial Auto Liability limits.
Read more on What to know about insuring Cargo Vans for Commercial Use.
Before you make any decisions, be sure to talk with a professional Trucking Insurance Broker.
She will best advise you on the potential cost of your premium based on a number of factors including vehicle type.
Where does a new Owner Operator find Commercial Trucking Liability Insurance?
For years there haven’t been enough affordable options for Commercial Trucking Liability.
Especially for brand new ventures.
So it’s truly exciting that GEICO has stepped into the arena for new Owner Operators and Motor Carriers.
We’re proud to be part of a select group of independent trucking insurance agencies representing them.
Talk with one of our professional Trucking Insurance Brokers, she’ll run several options for you.
At the moment, the lowest premium is probably GEICO, but next year, who knows?
It might be Progressive.
Every year, we shop around at your renewal time, so you don’t have to!
We’ve been a small family-owned agency looking out for the little guy since 2002.
Even if you don’t have your truck or van yet, give us a call and we can give you some free advice on how to get started with the lowest upfront overhead.