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Know Your Insurance Coverage

Being your own boss can be the American dream. As an independent driver, this dream comes with the costs and responsibilities of operating a business. You manage equipment leases, maintenance, fuel, tolls, recordkeeping, accounting, taxes, insurance, and so on. The array of this responsibility can be dizzying. This article will focus on insurance coverage for small trucking companies.

As everyone knows, inadequate insurance coverage can result in financial devastation. As a business owner, it’s wise to protect your business and your family by having proper insurance coverage.

Ensuring Proper Coverage

If you’re under lease with a motor carrier, they may provide liability coverage through their insurance company. But ask yourself; what do I have? Has my motor carrier provided me with a copy of the policy or just an insurance card or certificate of coverage? Don’t just assume your motor carrier’s coverage is adequate. Don’t assume you and your truck are listed on their policy. Get copies of the policies and make sure all agreements are in writing.

Make sure the following questions are answered:

  • What does the lease agreement say about liability insurance?
  • Who is responsible to secure the insurance?
  • Who will pay the premiums?
  • Will the costs be passed onto you and deducted from your settlement statements?
  • What happens if there is a claim?

Protect your business

As an independent owner operator, make sure you are fully protected. Under your liability insurance, coverage often applies to the other driver and their occupants.  The other parties may be covered for their property damage and bodily injury when you are at fault. There may be little or no coverage afforded to you or your vehicle.

Your insurance agent may recommend purchasing Physical Damage and/or Comprehensive insurance. Speak with your agent about all the coverage and endorsements that work best for your business.  Some of the most common may be Non-Trucking Liability or Bobtailing coverage and cargo insurance.

Operating Under Your Own Authority

If you are working under your own authority, you should minimally insure for liability insurance, physical damage coverage, cargo insurance and any other insurance your insurance agent recommends. The statement we hear often is “but, I have full coverage”. Full coverage to an agent might mean the coverage that is required, not the coverage you actually need. Your agent or broker should spend time with you to understand exactly what you need. You need choices, and understanding as to what you are purchasing, so you will feel confident that you are sufficiently covered in case of an accident.

Review Your Coverage Periodically

It is important to review your insurance coverage frequently. Make sure you are covered for all major scenarios which could harm your business. Work closely with your insurance agent and make sure your agent is proactive in his or her representation of you and your business.