In the United States, the trucking industry employs 7.3 million people and moves 10.5 billion tons of goods every year on average! With this much influence in the U.S comes an even bigger burden of liability. The Federal Motor Carrier Safety Administration regulates the standards of protection for the trucking industry to ensure increased safety for the employees, the goods being carried, and other drivers on the road.
While auto insurance requirements vary from state to state, with some not requiring coverage at all, the trucking industry is governed by the FMCSA. All commercial truckers are required to have insurance coverage in order to operate on the roads. Coverage will vary depending on the cargo, the freight, and the risk, but will always require a permit of insurance.
Liability Insurance for Trucking Industry
Liability insurance will protect you from claims that arise from bodily injury or property damage to others in the event of an accident or occurrence while on the road. This type of insurance is always mandatory for trucking, and only covers events that arise while using the vehicle. The FMSCA coverage requirements vary but range between $750,000 and $5,000,000. Typically, the standards of coverage are as follows:
Standard Cargo: $750,000 minimum for standard cargo with basic commodities and no extra risk
Federally Filed: $1,000,000 for trucking businesses that require a federal filing. This is for trucking businesses that engage in interstate trucking and carry non-exempt commodities.
Hazardous Cargo: $5,000,000 coverage is required for hazardous cargo that could pose a risk to health and or safety while transporting.
While these are the standard guidelines, it's important to file your application for coverage with the FMSCA to ensure you are aware of your coverage requirements. Additionally, these are merely the requirements, and many in the trucking business opt to purchase higher limits of coverage for additional protection.
General Liability for Trucking
It can be easy to confuse liability insurance and general liability as being the same coverage. They are actually quite different and cover significant risks. Where liability insurance covers injuries or damage to others while on the road, general liability covers damage to your vehicle or property. It also protects you from risks that occur while not actively driving. Some examples include:
- Clients falling and hurting themself
- Lawsuits from slander
- Wrong deliveries
- Damage to customer property.
This coverage will include limits for bodily injury, advertisement, medical payments, products and completed operations, and damage to premises. While this coverage is not mandatory, these risks come with a very high cost when paying out of pocket, and are not uncommon. Many of these situations require legal representation and legal fees alone are enough to cause financial distress. Purchasing your general liability before operating a trucking fleet will ensure you’re protected from common claims. There are many options to bundle your liability and general liability, giving you the opportunity to protect your business without breaking the bank.
Workers Compensation Coverage
General liability and liability insurance for trucking industries only cover bodily injury to customers or third-party individuals. This means none of the aforementioned coverages provide any protection for your business’s actual employees. Whether your employee injured themselves while operating the vehicle, in an accident, or working off-premise during work hours, these claims fall under the worker's compensation coverage. Workers' compensation is almost always required, but be sure to check with your state's regulations. This policy will cover claims associated with:
- Injuries to employees as a result of an accident
- Injuries to employees as a result of actions performed on behalf of the company
- Employee slip and falls
- Injuries to employees while performing routine truck stops and checks
The cost of workers' compensation coverage will depend on multiple factors, including the employee’s salary, risk, previous claims, and other variables. Workers' compensation is critical to a functioning business and protecting not only the employees in the event of a claim but also the financial burden that falls on the employer.
Cyber insurance is becoming increasingly more important in the trucking industry. More and more technical software is used to moderate and operate their trucking companies. Supply chain software, customers’ personally identifiable data, accounting information, delivery details, and the truck's physical software are all at risk of being hacked.
Transportation businesses are becoming increasingly popular for cyber schemes, especially as the industry moves to modernize its operations. If your data or fleet are compromised in any way, your business could face phishing schemes, data theft, and potential lawsuits in response. Purchasing cyber insurance for your business will protect you in the event of a claim, and provide funds to repair the damage from the occurrence.
Trucking Insurance with ECBM
Want to learn more about how to protect your business from all the risks it may face? ECBM has expert knowledge on a wide variety of insurance coverages. We can look closely at the vulnerabilities in your business and put together a comprehensive insurance coverage plan, specific to your needs. For more information, contact one of our agents today.