Comprehending The Requirements of Trucking Insurance
The backbone of U.S. commerce is reliant on trucks, as evidenced by the fact that in 2016, more than 70% of the country’s freight was transported by 3.5 million heavy-duty trucks. Trucking is responsible for moving 10.5 billion tons of goods and employing 7.3 million people annually.
The Federal Motor Carrier Safety Administration (FMCSA) imposes stringent insurance coverage regulations due to the large number of trucks on the road, their potential to cause significant damage and their susceptibility to theft. Furthermore, they transport valuable goods.
The Need For Proper Insurance
Trucks require proper insurance to operate legally, and the FMCSA, which issues permits necessary for conducting trucking business, will not grant operating authority without liability and cargo insurance. The extent of coverage varies depending on the type of freight being transported.
Hazardous material carriers and freight haulers who transport expensive or irreplaceable goods must adhere to stricter regulations and carry higher levels of insurance.
Trucking Cargo Insurance
Cargo insurance is necessary to protect the goods being transported in case of damage or loss. If a company delivers anything, cargo insurance is highly recommended, while federal law mandates cargo insurance for companies transporting household goods across state lines.
State requirements for additional insurance for specific types of cargo must also be followed, and trucking companies must maintain constant communication with insurance providers to ensure compliance with federal and state laws.
Liability insurance, which covers public liability, is federally mandated and depends on the truck’s weight and whether it carries hazardous materials.
Non-hazardous material carriers weighing 10,001 pounds or more must carry a $750,000 liability policy limit, while hazardous material carriers must carry significantly higher limits due to the risk and cost of cleaning up hazardous spills.
Voluntary coverages like physical damage coverage, non-trucking liability, and cyber liability insurance are also available to protect valuable trucks against natural disasters, theft, and cyber-attacks.
Trucking company owners must also consider other insurance types, such as property insurance to safeguard their building and parking terminals, workers’ compensation insurance to cover medical expenses and disability payments, cyber liability insurance to protect against credit card and data breaches, and health insurance and employee benefits to attract and retain quality staff.
Trucking Business Owners
If you run a trucking company, you’ll also need other types of insurance to protect your employees and manage long-term risks for your business.
- Property insurance: protects your building and parking terminals where trucks may be kept.
- Workers Comp insurance: deals with medical costs and disability payments for employees injured on the job.
- Cyber liability insurance: covers credit card issues, data breaches, and other cyber attacks.
- Health insurance and employee benefits: help you attract the best workers and preserve their health.