Assured Standard Logo
FREE Quote

Why Is Primary Liability Insurance Necessary For Trucking Companies?

Why Is Primary Liability Insurance Necessary For Trucking Companies?

Primary liability insurance is a cornerstone for trucking companies. But why is it deemed so vital? This article delves into its significance, highlighting the protections it offers and its role in maintaining the stability and compliance of trucking businesses within a high-risk industry. Join us as we unravel its importance for truckers.

Defining Primary Liability Insurance

Primary liability insurance is essential for businesses and individuals, offering the first line of defense against claims for injuries or property damage they cause. Legally or contractually mandated, it encompasses general liability (covering third-party injuries and property damage), professional liability (addressing service errors or negligence), and commercial auto liability (for vehicle-related accidents). This foundational insurance safeguards entities from potential financial repercussions.

Trucking Industry and Legal Requirements

The trucking industry is vital to the economy, transporting goods and materials across the country daily. As such, truckers and carriers must adhere to federal and state regulations to ensure the safety of everyone on the road and the timely delivery of freight. 

Trucking company owners and drivers must comply with these requirements to minimize the risk of accidents and legal disputes, maintain a good safety record, and keep their business running. In this article, we will discuss the major legal requirements that pertain to the trucking industry in the United States.

Federal Motor Carrier Safety Administration Regulations

The Federal Motor Carrier Safety Administration (FMCSA) oversees the U.S. trucking industry, aiming to reduce large vehicle-related crashes, injuries, and deaths. Key regulations include:

  • Hours of Service (HOS): This mandates driving and on-duty hours for truck drivers to combat fatigue. Notably, drivers are limited to an 11-hour driving span within a 14-hour workday and must take a 30-minute break after 8 hours. Weekly driving is capped at 60/70 hours based on the carrier's schedule.

  • Commercial Driver's License (CDL): A must-have for commercial drivers, obtaining a CDL involves clearing a written exam on traffic laws and trucking safety, a skills assessment, and meeting medical criteria.

  • Drug and Alcohol Testing: FMCSA enforces stringent testing rules, covering pre-employment, post-accident, and random checks, ensuring drivers aren't under substance influence.

  • Vehicle Inspections: Regular checks, pre, and post-trip by drivers and routine by mechanics, ensure trucks remain up to safety standards. Together, these regulations bolster safety in the trucking sector.

Minimum Liability Insurance Requirements

The FMCSA requires trucking companies in interstate commerce to have specific minimum liability insurance. Coverage depends on vehicle weight and cargo type. General freight carriers with vehicles over 10,000 pounds need at least $750,000 in coverage, while those under 10,000 require $300,000. However, hazardous materials carriers, due to potential accident damages, must have coverage ranging from $1 million to $5 million.

Additional State-Specific Requirements

The FMCSA requires trucking companies in interstate commerce to have specific minimum liability insurance. Coverage depends on vehicle weight and cargo type. General freight carriers with vehicles over 10,000 pounds need at least $750,000 in coverage, while those under 10,000 require $300,000. However, hazardous materials carriers, due to potential accident damages, must have coverage ranging from $1 million to $5 million.

Importance of Primary Liability Insurance for Trucking Companies

Primary liability insurance is vital for trucking companies, protecting them from financial losses due to accidents and legal issues. This coverage ensures compliance with industry regulations, preserving the company's reputation and financial health. Here's why it's essential: 

Protection Against Losses

Trucking companies encounter numerous operational risks that can incur major financial losses. Primary liability insurance offers extensive protection, covering:

  • Property Damage Liability: Covers damages to other properties caused by a company's vehicles, addressing repair and legal costs.

  • Bodily Injury Liability: Addresses medical bills, rehabilitation, and legal fees from company vehicle accidents.

  • Environmental Cleanup Liability: Covers costs for cleanup after accidents involving hazardous materials, preventing financial burdens on the company.

Legal and Regulatory Compliance

Primary liability insurance ensures trucking companies meet federal and state laws, like the FMCSA's mandate for interstate motor carriers to carry minimum liability insurance. This adherence prevents potential penalties and operational interruptions.

Financial Stability and Risk Management

Having this insurance aid in:

  • Handling Claims and Lawsuits: Offers financial protection against potential high-cost claims and legal disputes, letting companies operate without the concern of major expenses.

  • Mitigating Business Interruption: During substantial accidents or claims, insurance offers financial backing to minimize operational disruptions.

Cost Factors and Premium Calculation

For commercial truck insurance, understanding premium determinants is crucial. Factors like company size, coverage needs, driver experience, safety records, and truck maintenance impact costs. By strategizing around these variables, businesses can optimize insurance expenses and safeguard their finances.

Company size and specific coverage needs directly impact commercial truck insurance premiums. Larger firms typically face higher premiums due to increased risk. Coverage types, including liability, comprehensive, and cargo protection, are determined by business nature and vehicle type.

Driver experience and safety records also influence premiums. Insurers assess drivers' history, and businesses employing seasoned, safety-conscious drivers might receive lower rates. Enhancing safety through driver training and strict hiring can further reduce premiums.

The truck's age and condition matter. Newer trucks, having higher replacement values, command steeper premiums, whereas older trucks might be cheaper to insure. Regular maintenance reduces risks related to mechanical failures, potentially lowering premiums.

For premium reduction, businesses should:

  • Periodically review and adjust coverage.

  • Compare rates among different insurers.

  • Adopt safety measures like on-board cameras and driver training.

  • Investigate discounts, such as bundling policies or maintaining commendable safety records.

Understanding these cost determinants helps companies strategize to reduce insurance expenses while ensuring a safe environment for employees.

Supplemental Insurance Options for Trucking Companies

Supplemental insurance options are very important to trucking companies for protecting their business assets, employees, and financial stability. By investing in additional insurance policies beyond the minimum requirements, trucking companies can safeguard against potential liabilities, property damage, and unforeseen circumstances. 

This article will discuss various supplemental insurance options for trucking companies, including Physical Damage Insurance, Motor Truck Cargo Insurance, Non-Trucking Liability Insurance, GAP Insurance, and Umbrella Policies.

Physical Damage Insurance

Physical Damage Insurance shields trucking companies' assets like trucks and trailers, from accidents, theft, or disasters. It comprises Collision Insurance, for damages from vehicle collisions, and Comprehensive Insurance, covering non-collision events like theft or natural calamities. This insurance ensures operational efficiency, helping companies manage financial risks and safeguard their key investments.

Motor Truck Cargo Insurance

This insurance protects carriers against potential losses to the cargo they transport, resulting from accidents, theft, or other unexpected events. Especially vital for companies transporting high-value or perishable items, carriers should consider their average cargo value and maximum potential liability when selecting coverage. Engaging an experienced insurance agent can ensure adequate protection.

Non-Trucking Liability Insurance

Also known as Bobtail or Deadhead Insurance, this covers a truck's liability when not operating for business. Essential for companies with leased owner-operator trucks, it covers instances when the truck is used for personal reasons or maintenance and isn't transporting cargo. This insurance prevents costly legal issues arising from accidents outside the company's direct operation.

GAP Insurance and Umbrella Policies

GAP Insurance covers the difference between a vehicle's loan balance and its actual value after events like theft or accidents. Ideal for companies financing their vehicles, it prevents them from facing financial strain due to vehicle loss. Umbrella Policies extend coverage beyond primary insurance limits, useful when lawsuit settlements exceed the company's main policy limits.

For financial stability and risk reduction, trucking businesses should assess their needs and consult professionals on supplementary insurance. Proper coverage safeguards assets, employees, and reputation against unpredictable risks.

Selecting the Right Insurance Provider

Selecting the right insurance provider is an important decision to make, as it can affect your financial security and peace of mind. To make the most suitable choice, you must take into consideration a variety of factors such as coverage options, customer service, and the provider's reputation. In this comprehensive guide, we provide all the necessary information to assist you in choosing the right insurance provider.

Comparing Coverage Options

Insurance coverage varies from provider to provider, so it's crucial to compare the different policies and options offered by several companies. Here are some factors to consider when comparing coverage options:

  1. Type of coverage: Make sure to understand the different types of coverage available, such as life, health, auto, or home, and which ones best suit your needs. Providers may offer bundled packages that can save you money if you require multiple types of coverage.

  2. Policy terms: Look at the specific term lengths available for each policy. Some providers may offer more flexible or customizable term options than others. This can be particularly important for life insurance policies, where the term length can be a significant factor in your decision.

  3. Deductibles and premiums: Compare the premiums and deductibles of different policies — the amount you'll have to pay each month and the deductible amount you have to cover before the insurance kicks in. Higher deductibles generally result in lower premiums, but consider whether you can afford the deductible in an emergency.

  4. Coverage limits: Make sure to take note of the coverage limits for each policy when comparing options. Higher coverage limits tend to come with higher premiums, so balance your need for adequate coverage with your budget.

  5. Extra features: Some providers may offer additional features or benefits, such as accident forgiveness or rental car coverage. Consider whether these extras are relevant or valuable to you when making your decision.

Evaluating Customer Service and Claim Handling

When choosing an insurance provider, the quality of their customer service and claim handling is essential. You want a company that is responsive, helpful, and efficient when processing claims or assisting you with issues that arise. Here are some ways to assess the customer service quality of insurance providers:

  1. Online reviews: Look for customer reviews on sites such as Trustpilot or Better Business Bureau (BBB). These reviews can give you insights into the experiences of others and their satisfaction levels with the provider.

  2. Response time: Observe how long it takes for the provider to respond to your inquiries or concerns. A provider that takes too long to respond may indicate poor customer service.

  3. Availability of support channels: Check if the provider offers multiple ways to contact them, such as phone, email, or live chat. More support channels mean better accessibility and flexibility for customers.

  4. Speak with their representatives: Contact the provider's customer service and ask questions about their policies, coverage, or anything else you need clarification on. This will allow you to gauge their level of knowledge, communication skills, and willingness to help.

Understanding Exclusions and Limitations

Every insurance policy comes with exclusions and limitations, which refer to situations or events that are not covered by the policy. Understanding these exclusions and limitations is crucial in making an informed decision when choosing an insurance provider.

  1. Read the policy documents: Exclusions and limitations are outlined in the policy documents, so be sure to read through them carefully to fully understand what is and isn't covered by the policy.

  2. Clarify any uncertainties: If you have questions or concerns about specific exclusions or limitations in the policy, contact the insurance provider for clarification.

  3. Research common exclusions: Familiarize yourself with typical exclusions or limitations in the type of insurance you are considering. This will give you a better understanding of what may be standard industry exclusions or limitations and those that are unique to a specific provider.

  4. Assess your risk: Based on your lifestyle, location, and other factors, evaluate how likely you are to encounter situations or events that would fall under the exclusions or limitations. This will help you determine the importance of these exclusions in your decision-making process.

By considering coverage options, customer service quality, and policy exclusions and limitations, you can confidently choose the right insurance provider that meets your needs and offers the best protection for your financial security and peace of mind.


1. What primary role does primary liability insurance play for trucking companies?

Primary liability insurance protects trucking companies from financial loss due to legal liability for accidents involving their trucks and drivers. This coverage is essential in ensuring the company can cover damages and compensate those affected by accidents.

2. Why does the law require primary liability insurance for trucking companies?

Governments mandate primary liability insurance for trucking companies to ensure they have the financial resources to compensate accident victims. This requirement helps protect public safety and the interests of all parties involved in potential accidents.

3. Can trucking companies operate without primary liability insurance?

Failure to obtain primary liability insurance makes operating a trucking company illegal and exposes the business to severe penalties, including hefty fines and even license suspension. Trucking companies must always maintain this insurance to comply with legal requirements.

4. How does primary liability insurance benefit accident victims?

Primary liability insurance ensures that victims receive due compensation for injuries and damages when a trucking company is liable for an accident. It is a primary source of financial security for affected parties in cases of collisions or other incidents.

5. Are there other insurance policies trucking companies should consider?

Trucking companies can also benefit from additional coverage options like physical damage insurance, cargo insurance, and general liability insurance. These policies provide added financial protection for trucking operations and safeguard against losses not included in primary liability insurance.


In the dynamic world of trucking, unforeseen events can have significant financial implications. By understanding and strategically selecting insurance coverage like Motor Truck Cargo, Non-Trucking Liability, GAP, and Umbrella Policies, companies can navigate these challenges effectively. It's crucial for businesses to prioritize comprehensive protection, ensuring they remain resilient and thrive amidst potential risks and uncertainties.

Learn more about business interruption insurance from our blogs at Assured Standard.

Was this article helpful?
About the Author
assured standard logo
Assured Standard will protect your business with the right insurance, depending on your needs. Now more than ever, it’s crucial to have the right general liability insurance experts on your side. Protecting the future of your business starts today.
Commercial Truck Insurance
Business Insurance
Copyright © 2024 Assured Standard. All Rights Reserved.
cross linkedin facebook pinterest youtube rss twitter instagram facebook-blank rss-blank linkedin-blank pinterest youtube twitter instagram