The Trucking Insurance Glossary

Much like the world of truck drivers, insurance has it’s own language. Below is a comprehensive dictionary of trucking and insurance words. Understanding the terms used by insurance agents can help save you money and help make sure you have the right coverage.

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Air Cargo
Freight that is being transported through the air. It reimburses the insured for items that are damaged, destroyed, or lost.
Auto Liability
A term generally used in personal lines, Auto Liability covers someone from claims arising from injury or damage to others in the event of an accident. See Commercial Auto Liability for insurance related to business and truckers.
Bill of Lading (BL or BOL)
A document detailing the type, quantity, and destination carriage, along with any other conditions, of the goods being transported.
Bobtail Insurance
Bobtail insurance provides commercial liability coverage when there is no load attached to the truck. These trucks are said to be “bobtailing”.
Bonded Warehouse
A warehouse controlled by Customs where goods and merchandise is stored until duties are paid and the items are released.
Break-Bulk, Breakbulk, or Break Bulk is the separation of a consolidated load into multiple smaller shipments generally because it cannot fit into a standard size shipping container.
Cargo Insurance
(Also called freight, shipping, marine cargo insurance, or motor truck cargo insurance) A commercial trucking insurance policy designed to cover cargo during transit from loss, damage, or theft.
A company in the business of transporting products or people by land, sea, or air. A carrier usually works with a shipper to transport goods from one location to another.
Carrier Liability
A common carrier or trucking company‘s legal liability when it comes to shipment loss, damage, and delay other than an act of God, public authority/enemy, shipper, or the product itself.
A specialized trailer designed to transport intermodal (ocean) containers.
Collision Insurance
Helps to repair or replace your truck if it is damaged in an accident, collides with another object, overturns, or rolls over.
Commercial Auto Liability
A business insurance policy that protects your business from damages that may be incurred in an accident. This coverage provides compensation for damages to property and bodily injury. Policies can cover one specific unit or can be written to cover larger fleets. FMCSA regulations require all motor carriers to commercial auto liability insurance.
Common Authority
Trucking companies who provide for-hire truck transportation to the general public.
Common Carrier
A transport provider licensed by a regulatory body to offer his services to any company or person.
Comprehensive Insurance
Comprehensive Insurance provides protection against almost everything but a collision with another vehicle. It insures you for theft and vandalism.
When a carrier combines multiple (two or more) shipments into a single load to lower the cost of transportation.
Container (Intermodal Container)
A large metal shipment container commonly used for ocean and rail transportation. Containers may also be transported via trucks (See Chassis).
Container on Flatcar (COFC):
A combination of an intermodal container and a flat railcar that has no sides or ceiling. The container is loaded onto the railcar for transportation.
Contingent Cargo Insurance
Provides coverage when the primary cargo policy held by the trucking company fails to pay a claim against loss or damage.
Contract Authority
Trucking companies who provide for-hire truck transportation to specific, individual shipper, based on contractual agreements.
Contract Carrier
A company or person who provides transport services for a specified shipper on a long-term basis. The common carrier is under an agreement with the shipper agrees to work under specified conditions over the term of the contract.
Cost, Insurance, Freight
A type of term used in freight forwarding that designates that the seller is responsible for the cost of freight charges and marine insurance on ocean shipments.
A type of trucking company focused on efficient delivery of HVP (high-value products). This typically consists of expedite shipments and can include smaller shipments as well as FTL (full truckload).
Customs Broker
An individual or firm licensed by US Customs and Border Protection (CBP) to act as an intermediary for importers and exporters in handling the sequence of customs formalities involved in the customs clearance and importing/importation of goods.
The act of picking up goods, categorizing them based on destination, and moving them from a warehouse to their destination.
Transportation from point of origin to the recipient‘s door.
Transportation from point of origin to port of entry.
Drayage Carrier
A trucking company specializing in the transportation of goods via short distances, such as from rail yards and ports to nearby locations.
Dry Van
A freight trailer fully enclosed and used by commercial trucking companies. They are designed to carry palletized, boxed, or loose freight.
Excess Insurance Policy
Coverage that pays when a claim exceeds the primary coverage limit.
Excess Motor Trucking Cargo
A commercial trucking policy that provides additional coverage if, in the event of a claim, the primary cargo coverage has been exhausted.
Sending cargo to another country.
Fire and Theft Combined Additional Coverage (CAC)
Refers to physical damage coverage outside of a collision with another vehicle or object. This coverage is designed for heavy truck types. It does not cover windshield damage.
A type of trailer that consists only as a floor and is not enclosed
FMCSA (Federal Motor Carrier Safety Administration)
A federal entity established within the Department of Transportation for the purpose of regulating commercial trucking activities in the US. The FMCSA issues USDOT and motor carrier numbers and monitors safety compliance.
FOB Destination
Buyer takes possession of cargo at the freights destination.
FOB Origin
Buyer assumes possession and title of cargo the moment a freight carrier picks up and signs the BOL.
For Hire Carrier
A person or company that provides transportation of cargo, regulated property, household goods, or passengers in exchange for compensation.
Free Trade or Foreign Trade Zone (FTZ)
A government-approved secure area under U.S. Customs supervision where goods are held duty-free awaiting customs clearance.
Freight Brokerage
Often referred to as a third-party logistics provider or 3PL, a freight brokerage is a 3rd party liaison between shippers and carriers.
Freight Forwarder
An intermediary acting between transportation providers and shippers to move goods internationally.
Full Container Load (FCL)
An ocean shipment where the shipper has enough goods to fill a container.
Full Truckload (FTL)
A trucking shipment where one shipper has enough product to completely fill one truck.
Gross Vehicle Weight (GVW)
The total weight of an empty tractor or semi, plus the weight of the cargo contained in the vehicle.
Hire & Non-Owned Liability
Coverage for bodily injury and property damage caused by a vehicle you hire (including rental and loaner cars) or coverage caused by non-owned vehicles (owned by others including employees).
Receiving cargo from another country.
A contract between a company and policy holder where the policy holder makes premium payments to the company in exchange for financial compensation for losses, damage, illness, or death under conditions outline in the contract.
Insurance Market
An insurance company with the ability to underwrite business.
Insurance Quote
An estimate of premium for an insurance policy provided by a licensed insurance agent or broker.
Insurance Wholesalers
Business who operates between brokers and insurance carriers for specific kinds of insurance. This gives brokers access to lines that may not otherwise be available to them.
Interline Agreement
An agreement often established between motor carriers to exchange equipment during the course of transit or with permission to move equipment on behalf of the other trucking company.
Intermodal (IMDL)
The method of transporting freight utilizing two or more modes of transportation. For example rail, air, ocean, and truck.
Intermodal Marketing Company (IMC)
A 3PL purchases intermodal capacity and resells it to their customers. (See Third-Party Logistics)
International Fuel Tax Agreement (IFTA)
An agreement between the United States and Canada allowing commercial carriers to pay taxes on fuels and have these tax assessments paid to all participating areas.
Interstate Transportation
The transportation of cargo or people over state lines.
Intrastate Transportation
The transportation of cargo within the boundaries of a single state.
Lease Agreement
An agreement between an independent owner-operator and a truck company to run permanently under the authority of the trucking company.
Less-Than-Truckload (LTL)
A transportation method for shipments less than a full truckload, but larger than a typical parcel shipment.
The detail coordination of a complex operation involving acquisition, storing, and delivery of goods.
Loss runs
Insurance carrier reports showing the number of claims an insured has filed under their business insurance policies.
MCS 90
An endorsement to a commercial trucking or umbrella policy that proves compliance with federal regulations.
The method of transportation for cargo (i.e. rail, truck, air, ocean)
Motor Carrier
A company in the business of transporting products or people by land for compensation.
Motor Carrier Authority
A requirement through FMCSA that companies who operate as for-hire carriers, transport passengers for interstate commerce, or transport federally-regulated commodities in interstate commerce.
Motor Truck Cargo
Provides truckers liability coverage for freight or commodity that is damaged due to fire, collision, or striking of a load. This insurance is protection as required under the Motor Carrier Act of 1935.
Motor Truck Cargo Insurance
See Cargo Insurance
Motor Vehicle Report (MVR)
Also called a “driving record”, and MVR is a summary issued by each state that shows a driver‘s traffic violations, convictions, and accidents on file within that state.
Non-Trucking Liability
Different from Bobtail insurance, Non-Trucking Liability provides commercial liability coverage when a truck is no being used for business purposes. Examples include traveling to a repair shop or moving from one carrier‘s facility to another. Non-Trucking Liability applies whether a trailer is in tow. Most motor carriers require owner-operators carry Non-Trucking liability insurance.
Occupational Accident
Occupational accident provides medical, disability, survivor, and death and dismemberment coverage for truck owner-operators and contract drivers if they are injured on the job. Other benefits can include:

  • Temporary Total Disability
  • Continuous Total Disability
  • Non-Occupational Accident Benefit
  • Hernia & Hemorrhoid Benefit
  • Chiropractic Benefit
  • Passenger Accident Benefit
  • Contingent Liability Insurance

*Truckers Occupational Accident Insurance is not Workers‘ Compensation coverage and is not a substitute for Workers‘ Compensation coverage.

On-Hook Coverage
Insurance to cover a car in the process of being towed by a tow truck.
Owner Operator
A driver who owns and operates his/her own trucking business. Owner-operators will often operate under the motor carrier authority of a trucking company under a lease agreement.
Partial Shipment
Delivery of cargo in more than one shipment.
Physical Damage
A general term for a group of coverages that include Collision, Comprehensive, Fire and Theft with Combined Additional Coverage (CAC).
Optional Coverages Available:
Lease Gap Coverage: Pays the difference between the balance of a lease or loan on your truck and the actual cash value of the vehicle.
Personal Effects Coverage: Covers the loss or theft of personal belongings.
Electronic Equipment Coverage: A Physical Damage policy only covers electronic equipment that was installed by the manufacturer. Electronic Equipment Coverage extends your policy to cover additional electronic items such as computers, electronic logging devices (ELDs), satellite monitoring systems, and more.
Combined Deductibles: Allows you to pay only one deductible in the event of loss affecting both the truck and cargo.
Mechanical Breakdown Towing Coverage: Covers towing and/or roadside labor due to mechanical breakdown
Loss of Use Coverage: Covers the cost of living arrangements while repairs are taking place.
Pet Coverage: Coverage for your pet if it is injured in an accident involving the vehicle.
Reefer or Refrigerated Trailers
An enclosed, refrigerated trailer that is attached to a semi-truck. It is temperature controlled to keep perishables refrigerated.
The party that prepares and tenders cargo for shipment.
Small Parcel
A form of transportation-focused around the delivery of packages (generally through FedEx, UPS, or USPS.
Straight Truck
A truck where all axels are attached to the same frame. The cab and trailer are permanently attached to each other and are a single vehicle.
Supply Chain
The network between a company and its suppliers to produce and distribute a specific product to the final buyer.
Trailer Interchange
Trailer Interchange coverage provides Physical Damage Insurance for damage caused by you to trailers owned by others under a trailer interchange agreement. Most Intermodal shipping companies require a Trailer Interchange policy. Coverage is also available, by endorsement, under the business auto policy (BAP).
Trailer on Flatcar (TOFC)
Also known as a “piggyback”, an TOFC is where the truck and it‘s container are loaded onto a flat railcar for transportation.
Transportation Risk
The inherent risk involved with a transportation or logistics activity.
Transportation Risk Specialists
Transportation experts that have received specialized training and have the knowledge and experience when it comes to understanding the trucking and logistics marketplace.
Umbrella Insurance
Extra insurance that increases the limit of a primary policy. This coverage only kicks in after the primary coverage limit has been reached.
A large building utilized for storing goods, sometimes on behalf of another party. Warehouses are used by manufacturers, importers, exporters, customs, transport companies, and others.
Warehouse Legal Liability
Coverage for physical loss or damage of property during the storage, cross-docking, or other services provided by the warehouse.
Workers Compensation Insurance
Workers Compensation pays employees in the event they are injured on the job. Coverage can include medical benefits, lost income, and death benefits.