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How to Choose the Best Trucking Insurance Policy in 2023

Do you need insurance cover for your truck? If YES, here are 7 best insurance policies for your trucking company plus 5 tips to help reduce your premium. Trust me, when you start your trucking business, you are going to be very busy. It even gets more challenging when you operate the business yourself.

You will be so busy that you would barely have time to conduct research like you are doing now; it’s likely that you would be more occupied with the operational aspects of the business than with anything else. That is why it is important to carefully strategize before going into the business.

Do all your research and investigations now and most importantly, have a business plan so that when you are at crossroads; all you need to do is to look consult your business plan and you will have a clearer idea of what to do. Insurance is one of those things that you have to carefully plan for. Haulage is a very interesting but risky business.

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A lot of things could go wrong; accidents, thefts, law suits and a host of other things but with the right insurance policies in place, all of this could be a walkover for you. But one question that comes to the mind of haulage business owners is “What is the best insurance policy for a haulage business?” Well, let’s take a comprehensive look at how to select insurance for your haulage business as well as the buying procedure.

How to Choose the Best Insurance Policy for your Trucking Company

Table of Content

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1. Select a specialized Insurance Agent / Insurance Company

There are a lot of insurance companies but not all insurance companies specifically cover haulage companies. A company that specializes in providing insurance coverage for haulage businesses is your best bet in this business. Such companies understand more about the industry and design their products to fit the haulage business owners’ special needs.

They also understand all rules and regulations guiding the industry and would be able to advise and guide you appropriately. When you want to choose an insurance company, some things you have to put into consideration include-:

2. The company’s experience

You have to consider the number of years the company has been in business and how much experience the company has with insuring haulage businesses. A company that has been in existence for a long period of time is better and more reliable than a new insurance company.

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3. The company’s financial strength

You also have to look into the company’s income statement to see if the company is strong enough financially and has enough reserves to pay claims when it arises.

4. Available Policies and extent of coverage

Next, you should look into the insurance policies the company has especially for haulage businesses and the extent of coverage offered by each of the policies.

5. Claims Processing

Next, you should find out from other haulage contractors; how reliable the insurance company is, how fast claims are processed and general reviews about the company from people who have used them or currently using them.

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6. Receive Quotes and Compare Prices

Once you enter into an insurance contract, it becomes binding. You start to pay premiums to the insurance company and of course, these premiums would come from your business income and profits. Therefore, you must take time to compare different quotes and settle for the most suitable option for you in terms of affordability and coverage.

In a bid to get an insurance policy with the best coverage, don’t neglect the coverage factor. Coverage is just as important as price. What I am saying in essence is that you should go for a policy that is both affordable and comprehensive.

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To know how to reduce your premiums, you need to know some of the factors used in determining premiums for haulage businesses. Some of them include-:

  • The driver’s age, experience and driving history.
  • Type of vehicle.
  • Type of commodities to be carried.
  • Deductibles
  • Mileage or gross receipts

You can also reduce your insurance premium by carrying out adequate risk assessment and control. As for the types of insurance products you need, they include-:

Types of Insurance Policy for Trucking Companies

There are essential insurance policies that you must have in place if you run a trucking business. The truth is that, you wouldn’t be allowed to operate a trucking business in the united states, Canada and in most countries of the world if you do not have certain insurance cover.

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Besides most people that may want to do business with you can only become comfortable if they know that you have certain insurance policy for your business. These are some of the basic insurance cover that you should consider purchasing if you want to start your own trucking business in the United States of America or Canada;

  • Commercial Auto Liability

This type of insurance is designed to cover for damages caused by your truck to other road users. It can cover for bodily injury as well as property damage.

  • Physical Damage Coverage

This type of insurance is designed to cover for any damage that could happen to your truck and put you out of business. This damage could be as a result of an accident, fire incident, theft or vandalism. This type of insurance also provides 24-hour coverage for your trucks, so whether you are working by day or by night, your business is covered.

  • Motor Truck Cargo Insurance (Comprehensive)

When conducting your haulage business, goods and valuables would be transferred to your custody and you would be expected to care for them. If anything happens to the goods while in your custody, you would be held accountable and that is what this type of insurance is for; to cover for loss or damage of goods trusted to your care.

  • Bobtail Insurance

If you are an owner-operator, you would most likely need this type of insurance. This is because you would likely be using your truck for personal use sometimes and your truck is just as exposed to risk when used for personal use as it is when used for business. If damage occurs during a period of private use, bobtail insurance policy takes care of it.

  • Occupational accident insurance

In your trucking business, your driver is the most important asset and you have to protect them. Occupation accident insurance covers your driver’s medical bills and other expenses when accidents occur in the line of duty. It also covers for compensations in cases of death.

  • Non-Owned Truck Insurance

If you are using a hired or leased truck to run your haulage business, this is the type of insurance product that you would need.

  • General liability Insurance

You may also need this type of insurance to cover for other aspects of your business that are not transportation related. For instance, you may want to protect your business premises, property and other assets of your business and you would need General Liability Insurance to cover for that.

  • Health / medical insurance
  • Liability insurance
  • Workers Compensation
  • Overhead expense disability insurance
  • Business owner’s policy group insurance
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General liability insurance

General liability insurance is an insurance policy coverage that protects your business from a variety of claims including bodily injury, damage to property, personal injury and other issues that can arise in the course of running your business. It should be noted that some insurance companies combine general liability insurance with property insurance if you get a business owners policy (BOP).

General insurance covers a trucking company for delivering goods to the wrong location, accident in the workplace, the unruly behavior of your truck drivers and other employees that may lead a client to sue your business. Note that some insurance companies would also require you to get primary liability policy before you can be qualified for general liability. Again, if you are hauling hazardous materials, you may be required to add a pollution endorsement.

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General liability for trucking companies typically start at a policy limit of 300,000 dollars. It should be also noted that a trucking company, depending on its size can obtain higher limits if needed.

  • Cargo insurance

As long as your business is involved in for-hire trucking of clients’ property, you need this policy. Cargo insurance is an insurance policy carried out on the cargo or freight being shipped by a trucking company. This insurance policy covers the business in case the cargo gets lost or damaged due to fire or collision.

Cargo insurance also covers for accidental dumping of cargo and removal of debris or pollution caused by dumping of cargo. This policy also covers for cargo that doesn’t get delivered, and sometimes for late delivery of goods. In the cargo insurance coverage, you get to set the limit of your coverage.

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What you choose would determine what your insurance company would have to pay. You can also get to choose the limit of your deductible, which is the amount your business has to pay in case a client files a claim. Even though your deductible reduces the cost of your insurance, but your trucking company must choose a deductible it can afford to pay without closing shop.

Cargo insurance covers for the following types of vehicles, cargo trucks, tractors, trailers, box trucks, cement mixers and dump trucks etc. Cargo insurance typically does not cover freight that involves art, paper, money, jewelry, animals, contraband, tobacco, explosives, alcohol etc, but these restrictions differ between companies.

  • Bodily Injury and Property Damage (BIPD)

Bodily injury and property damage are in fact two of the most important insurance policies a for-hire trucking company is expected to have. The Bodily Injury (BI) aspect of the insurance covers for accidents and injuries that can occur during transit.

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The claims covered here include medical bills, and pain and suffering claims; while the property damage (PD) aspect takes care of vehicles and property that was damaged in transit through accident. The BPID insurance equally has limits and you can speak to your insurance agent to decide what limits your business can handle.

  • Physical damage insurance

Physical damage insurance is of two types; collision and comprehensive car insurance. These two policies cover for any type of damage to trucks and trailers and they can be purchased separately. Collision insurance covers for vehicle accidents that result from collision or running into an object, while comprehensive car insurance covers a vehicle for fire, theft, vandalism, animal attack, etc. Physical damage insurance can be purchased anywhere between 25 dollars and 77 dollars.

  • Excess/Umbrella insurance

This insurance policy is made to provide protection against huge, unexpected and unintended circumstances that haulage companies encounter. This insurance coverage involves higher limits and broader coverage than most primary insurance plans. This policy is generally needed when a trucking company has surpassed its insurance limit with a primary policy or if the company requires larger insurance limits.

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Excess/umbrella insurance can sometimes cover for liability over 25 million dollars.

  • Bobtail insurance

This policy is also known as non-trucking liability, and it covers your truck when it is not on the road, that is if the truck is not being put to use to transport goods. This insurance policy basically covers for truck inactivity, example when the tuck is undergoing repairs.

What Determines the Cost of Insurance Cover for a Trucking Company?

The cost of truck insurance is determined by several factors which may include;

  • The business type and age
  • The radius your deliveries cover
  • Your vehicle age
  • Your location
  • The cargo you deliver
  • The driving history of your drivers and their age
  • The size of your business
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What is the Best Insurance Policy for a Trucking Business?

Like we said earlier, the commercial for-hire trucking business is a very risky business as a lot of things can go wrong, so you need the best insurance policy to protect your business from claims and liabilities.

Finding the best insurance policy for your business is equally very important because a lot of insurance functions are duplicated, so getting the best policy would help you save a lot of money which can be channeled to other aspects of the business.

Shopping for insurance for this business can be very confusing, if not a herculean task because of the various insurance policies available to entrepreneurs in this industry, which all serve varied functions, and is aimed at protecting various aspects of the business from various angles. But if we have to pick out the best insurance policy from the lineup, then it would be the general liability insurance.

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Why, you may ask?

This is because general liability insurance inculcates almost all the insurance coverage needed by an average trucking company. It brings them all under one umbrella. General insurance can cover a trucking company for bodily injury, damage to property, personal injury, wrong delivery of cargo and even loss of cargo. It equally covers for claims that may result from the unruly behavior of drivers and other employees.

Again, depending on your business, some insurance companies may require you to get certain policies before you can be given general liability insurance, example getting pollution endorsement if you are moving hazardous materials. This rule helps to ensure that your business is adequately covered against claims your general policy cannot handle.

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When analyzing the above, one gets to discover that with general liability insurance, a trucking company may not need a separate cargo insurance, physical damage insurance, BPID insurance, umbrella insurance etc., because all these policies have been lumped under one policy.

How Much Does It Cost to Get Trucking Insurance?

General liability insurance in the United States can cost anything from 300,000 dollars upwards. According to commercial truck insurance, the commonest limits available are 1,000,000 dollars per occurrence with 2,000,000 dollars aggregate.

On the flipside…

While it may be correct that general liability insurance gives a better coverage than most other insurance policies, it should be noted that general liability insurance does not cover for every liability that your trucking business is supposed to be protected against, and even if it does, it may not give adequate and in-depth coverage.

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Example, general liability insurance may not cover property damage like damage to your building resulting from natural disasters, it does not cover employee claims, it may not cover for employee injury as it only covers for third party injury, and it may not cover for when your truck is out of activity like the bobtail insurance, etc.

Again, general liability may not have the capacity to cover massive freight just like excess/umbrella insurance, and it may not give comprehensive coverage to your clients’ cargo, which basically is the only thing that keeps you in business.

Also, because general liability insurance offer a lot of insurance policies under one umbrella, the premiums tend to be quite expensive when compared to other single insurance policies, in addition to the fact that it might not give you total coverage for your trucking business.

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So, while general liability insurance may be good and cheaper for you in the long run, it is also safe to take out other insurance policies that your company may need but which are not adequately or not even covered under this policy. You may decide to get your lawyer or insurance agent to help you so you don’t fall into the trap of acquiring insurance policies that offer duplicate coverage.