As the owner or operator of a trucking enterprise, you are required to have insurance. Most people in the trucking industry are aware of this fact; however, many are not aware of how much trucking insurance coverage they should actually purchase. While there is no way to know exactly how much insurance coverage will cost until you take steps to obtain a quote, you can figure out how much and what type of coverage you will need beforehand.
What Types of Coverage Will You Need?
The type of trucking company you run will greatly influence the type of insurance you need. In general, trucking businesses either operate under their own authority or lease with a motor carrier. If you operate under your own authority, you will need to purchase more coverage. You may need commercial liability, general liability, cargo liability, physical damage, and workers’ compensation insurance.
If you are leasing with a motor carrier, more than likely you already have some insurance. However, even if the company you lease with provides some coverage, you will still probably need to purchase workers’ compensation, non-trucking liability, and physical damage insurance.
What Does Each Type of Insurance Cover?
Each type of insurance provides a different type of coverage. Many of these insurances are required by state or federal law, so you should do your research before shopping for policies. Here are some of the most common types of insurance and what they cover:
- Commercial general liability – Protects you from certain expenses, such as litigation, that may result from any damage you cause to the property of others
- Commercial auto liability – Covers you in the event you injure others or damage their property
- Workers’ compensation – Provides employees with financial resources when they are injured on the job
- Cargo insurance – Covers damages that occur to any items you are responsible for transporting
- Non-trucking liability – Protects you from expenses related to any bodily injury or property damage inflicted on another party if you do not operate under the authority of a motor carrier you lease with
- Physical damage insurance – Provides compensation if your property is damaged by vandalism, weather, fire, or theft
Before purchasing any insurance policy, take the time to thoroughly understand what the insurer will and will not cover.
How Much Will You Need To Spend on Insurance?
If you are like many trucking company owners, you are probably concerned with insurance costs. Having an idea of what you will need to spend can soften the blow and prevent surprises. If you operate under your own authority, you can expect to spend $12,000-$20,000 to fully insure each truck. This equates to roughly $1,000-$1,667 monthly. If you lease with a motor carrier, you can expect to spend $3,000-$5,000 per truck each year, or roughly $250-$400 monthly on each truck.
The cost of each type of insurance will vary depending on the insurer and the amount of coverage you purchase. Your credit history will also have an impact on how much you pay. In most cases, commercial auto liability insurance will be your greatest expense. You can expect to spend $8,000-$14,000 yearly on coverage for each truck. Workers’ compensation is typically the second largest expense, and you can expect to spend approximately $3,000-$5,000 yearly.
Finding the perfect insurance coverage can be difficult, especially if you are the owner of a trucking company. There are numerous financial and personal factors to consider, and you don’t want to purchase an inadequate amount of coverage. Here at Rev Insurance, we can help you find the coverage you need. We offer several types of insurance for a wide range of trucking companies. Contact us today to learn more.