In the trucking industry, there is a progression for drivers. First, they start as a company driver, then, they become an owner/operator, until finally, acquiring own authority. Every step comes with larger needs and responsibilities. Therefore, they also come with additional regulation and larger scope of insurance.
Owner-operators require a special kind of commercial truck insurance depending on two things. They can be working under a permanent lease with a motor carrier, or they might work under their own authority.
For owner-operators who work with a separate entity, the norm is that they will provide primary liability insurance while they are signed together under a lease. However, that is not enough for a trucking company. In these situations, additional insurance is required.
Depending on the extent of the truck operating business, the owner-operator must add non-trucking liability coverages, physical damage coverage, and trailer interchange insurance.
For those who have their own authority, their commercial truck insurance will usually have the following in their coverages:
Liability insurance pays for the damages that a truck under the company cause to other people and their property in case of an accident. The scope of trucking liability insurance extends to two main things: bodily injury and property damage.
On one hand, bodily damage liability coverage will pay for expenses like medical bills, hospital bills, nursing care, compensation for work lost, rehabilitation, therapy, treatments, compensation for pain and suffering, and other similar expenses, depending on the extent of the limits.
On the other hand, property damage liability insurance will cover the expenses for repairing or replacing damaged items like vehicles, houses, buildings, or even lamp posts, depending on the limitations declared.
Physical damage is a segment of trucking insurance that deals with the repair or replacement of a vehicle or its parts during accidents. The physical damage coverage usually extends to collisions with other objects or vehicles, as well as when the vehicle overturns.
Depending on the extent of coverage or the state where the insurance is acquired, physical damage may also pay when the vehicle is stolen.
Motor truck cargo insurance helps the owner-operator make sure that the freight carried by the truck is protected. In an unfortunate instance that the freight gets lost or gets damaged by an accident, fire, or flooding, the insurance policy covers the liability.
There are insurance companies that provide coverage extending to cleaning up the freight if they get disposed of in a waterway or roadway. Moreover, owner-operators can request help through their agents to extend coverage to costs and labor, legal expenses for claims, settlement of claims, and freight charges during claims.
Though this type of coverage is a good add-on to a commercial truck insurance policy, it has its limitations. Most of the time, items like art, jewelry, contraband, shipping containers, explosives, and other similar materials cannot be insured.
To get the best coverage for their business, owner-operators can also benefit from motor truck general liability in their policy. This will pay for any property damages or injury that might occur in an accident that is not directly related to operating a truck or trailer.
For instance, the coverage of this type of commercial truck insurance includes libel or slander problems, actions of a driver employee while working, errors in delivery that led to loss or damage, and customers getting an injury while visiting the premises.
'Own authority' means that a truck driver or trucking company has obtained their own Motor Carrier (MC) authority from the Federal Motor Carrier Safety Administration, allowing them to operate independently.
Truckers with their own authority are typically required to have primary liability insurance. They may also need other types of coverage, such as cargo insurance, depending on the nature of their operations.
Yes, drivers with their own authority usually face higher insurance costs as they are fully responsible for their operations and any associated risks.
For one to get own authority, the cost for the actual authority from the FMCSA is $300. However, there are other expenses that need to be settled. Most of the time, an owner-operator needs to prepare for these things:
Your trucking business deserves the best insurance policy. Let Assured Standard help you find the best insurance policy today!
