If you are thinking of starting your own trucking company or buying a truck and becoming an owner-operator, you might be wondering what your expenses will be. You know you will have to hire drivers, buy or lease trucks and find a place to keep those trucks. You will also have to buy commercial truck insurance for each of your vehicles.
You always want to do your homework and call several companies to find the very best rates. You should always look for a company that specializes in trucking insurance. There are several different types of insurance that you will need.
If you look at commercial truck insurance at Simplex Group or another trucking compliance company, you will see that you need liability insurance to operate a trucking company legally in the United States. The federal motor carrier safety administration requires that trucking companies that have vehicles that cross state lines and operate vehicles that are over 10,000 pounds carry between $750,00 and $5,000,000 of liability insurance. The exact amount will depend on the commodities being transported. If you buy your insurance from a company that specializes in trucking, they will be able to put together an affordable package for you. It is always best to bundle Your liability insurance with the other types of insurance that you will need.
The FMCSA requires that moving companies have $5,000 of insurance per vehicle and $10,000 of insurance per accident. They do not officially require commercial trucking companies to have cargo insurance. However, no trucking company in the world would ever be able to operate without this kind of insurance.
Your clients will insist that you have a certain amount of insurance to carry their cargo. This amount will be specified in the contract that you have with them. At a minimum, the amount of coverage you have should cover the wholesale value of their products.
If you do not carry that amount of insurance, they can sue you for a breach of contract and they can also sue you for damages to their property.
Physical Damage Insurance
If your driver causes an accident, your liability insurance will pay for the damage they do to anyone else’s property. It will also pay the medical bills of anyone they injure. If you are a new trucking company, your trucks are probably financed. The finance company is likely to require you to have physical damage insurance.
Physical damage insurance will cover damage to your truck in the event of an accident. As with liability insurance, the better your driver’s driving records are, the lower the cost of physical damage insurance will be.
General Liability Insurance
Like any business, your company will have to have general liability insurance for your facility. A trucking company has multiple people coming in and out of its doors every day. You will have vending machine suppliers delivering their products to your facility and you will have vendors coming in trying to sell you office supplies.
If someone injures themselves on your property, you will be liable to pay their medical bills. Hence, it is important to have general liability insurance. People who actually work for you will be covered by your worker’s compensation insurance.
Nobody wants to think about having accidents. However, you must have trucking insurance to comply with the law and keep your employees and the public safe.