What You Need to Know About Commercial Trucking Insurance

Big white semi truck driving on a road near lake

If you use commercial trucks for logistics, transportation, or service delivery, you need specialty trucking insurance.

Commercial trucking insurance acts as a safeguard, protecting against risks like accidents and cargo damage, which happen more frequently than you might anticipate. According to the National Safety Council’s most recent statistics, over 117,000 large trucks were involved in crashes in 2021 in the United States. And these incidents can vary in severity and frequency—according to the same statistics, there were a reported 5,700 trucks that were involved in a fatal crash.

By securing the right commercial trucking insurance plan, your business will be better equipped to handle unforeseen accidents and maintain operational integrity.

Required Coverage

All businesses that use commercial trucks are required to have motor carrier auto liability insurance, which covers damages or injuries to others in an accident. Commercial motor carrier companies that don’t have liability insurance will not receive operational authority from the Federal Motor Carrier Safety Administration (FMSCA). And if you don’t have liability insurance, you risk paying significant out-of-pocket expenses for damages, legal settlements, and loss of goods.

The FMSCA also has minimum liability coverage standards that vary depending on the type of freight transported and the vehicle’s weight. For example, trucks carrying non-hazardous freight across state lines must have a minimum of $750,000 in liability insurance. Working with an insurance agent is important to ensure you’re meeting federal insurance regulations.

Please visit the FMSCA’s website for more information on insurance filing requirements.

Important Coverage to Consider

Even though you’re only required to have liability insurance, there are several additional coverages you should consider adding to your custom plan, including:

Excess Liability: This type of coverage provides more protection beyond the standard liability limits. Excess liability is important because accidents often result in substantial damages and legal claims exceeding basic liability coverage. By adding this to your plan, you’re protecting your company against potentially catastrophic financial losses.
Hired & Non-Owned: This covers vehicles not owned by the company but used for business purposes. For instance, having hired and non-owned coverage is essential if you own a consulting firm that frequently rents vehicles for client visits or a business that requires employees to use their personal cars to deliver services.
Motor Truck Cargo: Cargo insurance protects freights or commodities transported by your trucks. Although this isn’t mandatory to purchase, it’s highly recommended if you frequently transport goods.
Trailer Interchange: Any logistics companies frequently entering trailer interchange agreements should consider adding this coverage. Trailer interchange insurance covers physical damage to the non-owned trailer while under the company’s control, mitigating financial risks associated with injuries that can occur during these interchange periods.
Terminal Coverage: Terminal coverage protects freight stored at specific terminals for a limited time and is essential for any logistics/transportation company.
Bobtail Insurance: Bobtail insurance covers tractors when they’re not operated without a trailer/not hauling cargo. This type of coverage is ideal for independent truckers or owner-operators who frequently drive their tractors without a trailer, often between jobs or after a delivery.
Non-Trucking Liability: This type of liability coverage protects drivers using their trucks for personal activities outside the motor carrier’s commercial coverage and is crucial for protecting independent truck operators and owner-operators.

Costs

Several factors may influence the cost of your commercial trucking insurance plan, including:

The Types of Goods Being Transported: Different cargo types have varying risks, affecting premiums. Items that are more valuable, hazardous, or prone to theft, like electronics and medication, typically result in higher premiums to offset the increased risk.
Operating Radius: The distance and areas covered can affect risk levels. If your company covers a larger distance, your insurance premiums may be higher due to the increased risk associated with longer travel times and exposure to various road conditions. Additionally, you may also notice higher premiums if you operate in areas with higher traffic density, higher accident/theft rates, or extreme weather conditions.
Truck Value & Condition: The truck’s market value may increase or decrease premiums. Trucks with advanced technology and features often have higher values, leading to increased insurance costs due to the higher cost of repairs and replacements. The truck’s condition may also impact insurance costs—older trucks usually result in higher premiums.
Driver Records: The driving history of operators also plays a crucial role in insurance costs. If the driver has more points on their license, the insurance costs will typically increase because these points indicate traffic violations and accidents. Other factors in a driver’s record that impact cost include history of accidents, traffic violations, and the length of time they’ve been driving commercially.
Coverage Level: The extent and limits of your coverage will impact the cost. Higher limits provide more protection but come at a higher premium. Conversely, lower limits or opting for more basic coverage can reduce premiums but means less protection. Balancing the level of coverage with the cost is a key consideration.
Claim History: If your company has a history of frequent or severe claims, your insurance premiums will be higher.

How to Get Commercial Trucking Insurance

When you create your commercial trucking insurance plan, you need to provide your agent with the following information:

Vehicle Information: This includes the number of trucks you have and the make, model, year, and condition of each truck.
Driver Information: The agent will need the driving records and licenses of all your drivers.
Business Details: This includes what type of business you are, the size of your company, and the types of goods you transport (if any).
Insurance History: Insurance includes records of past insurance plans and claims.

Get a Free Quote Today

Find the right commercial trucking insurance plan with help from our team at Allied Insurance Managers.

Founded in 1987, Allied Insurance Managers is one of the largest independent insurance agencies in Michigan. Every year, we develop thousands of programs for individuals and businesses across the United States. We offer commercial trucking programs for fleet (10 or more units) and non-fleet (1 to 9 units).

Please contact us today to request a free quote. For a speedier process, please fill out this questionnaire before you contact us.

Robert Peterson's Bio

Rob is a 2001 graduate of Central Michigan University, with a Bachelor’s degree in Business Administration. He started his career in the Supply Chain industry and has spent 13 of the last 22 years working for some of the most recognizable names in trucking/transportation space, most recently serving as Managing Director of Midwest Operations for England Logistics. He was awarded Schneider National’s Presidential Award for Continuous Improvement in 2003 and earned his Lean Six Sigma Black Belt via General Electric’s prestigious program while working for Penske in 2010.