Do I Need Owner-Operator Insurance For My Fleets?

by Insurance 09 February 2023

Owner-Operator Insurance

Congratulations! You are an owner-operator now. Being your own boss gives a liberating feeling but managing everything single-handedly in the trucking business is tough. The first thing that needs to be done is to buy adequate truck insurance for your fleet of vehicles. Learn what sort of coverages you require as an owner-operator!

A one size fits all solution doesn’t work for owner-operators when it comes to purchasing truck insurance. Trucking is a risky as well as a rewarding line of business.

When you decide to run your trucking operations yourself then there are several things that require to be done. From choosing the right type of commercial vehicle to buying the right owner-operator insurance, all need to be taken care of. 

As an owner-operator, you have a unique set of needs and it is vital to understand each before buying a policy. You get several options based on driving records, operating radius, haul type, and level of experience.

Furthermore, a few insurance requisites depend on the state requirements. So, make sure that you review state regulations according to the nature and size of your business.

We spoke to many insurance experts who gave us some insightful tips for choosing owner-operator insurance. Read each of them to make an informed decision and get the most out of the money spent on ensuring your fleet.

Why do owner-operators need adequate coverage?

Having adequate owner-operator insurance is not only beneficial but essential coverage to operate legally on the road. This coverage protects you against physical injuries, property damage, accidental death, and lawsuits.

Sticking to minimum state requirements only protects the other people on the road, not your business. You need to take additional coverages that safeguard your business operations, your truckers, and your reputation as well.

Even a minute accident can put your trucking operations on pause, impacting your livelihood. So, you unfailingly need owner-operator insurance to get financial comfort when such an incident happens.

Types of coverage you need as an owner-operator

Types of coverage

As an owner-operator, you require a set of specific insurance services and products.

Your level of coverage will be based on two categories:

  • Working under own authority
  • Leased to a motor carrier

To choose the best truck policy and protect your trucking business, you need to understand the different coverages that you need under both categories.

Owner-Operator Working Under Own Authority

From billing and booking shipments to taking care of vital paperwork and buying insurance. If you are working on your own authority and handle every chore yourself then you fall under this category.

You need to get your own owner-operator truck policy including:

1. Primary liability insurance

Primary liability insurance is a state-mandated policy that covers the third party from property damage and bodily injury. It compensates for all the losses that other people suffered in an accident.

2. Physical damage

This coverage pays for all the repair expenses that you incur after an incident. No matter which party was at fault, physical damage coverage compensates for the cost of repairing your truck.

3. Motor truck cargo insurance

The shipment you haul is the lifeblood of your business. Any type of damage or loss to the cargo can bring grave consequences. Here motor truck cargo insurance is a great coverage to opt for. It compensates you when you lose cargo due to theft, fire, explosion, vandalism, etc.

4. General liability insurance

General liability insurance comes to play when you cause any property damage or bodily injury to other people while carrying out business-related activities, not trucking. For example, when your workers injure a third party when unloading or loading the cargo.

The FMCA (Federal Motor Carrier Safety Administration) might need some other coverages to add to your owner-operator insurance. You will be required to meet all these requisites before commencing your trucking operations. Make sure to meet the criteria before hitting the road.

Owner-Operator Leased To A Motor Carrier

A. Non-trucking liability

This coverage protects the owner-operators against property damage or physical injury arising in an accident when the driver is off dispatch or using the vehicle for personal purposes. Non-trucking liability coverage pays for all losses and injuries happening in such scenarios.

B. Physical damage

As mentioned above, physical damage coverage pays for the repair expenses of your truck which gets badly impaired in an accident. This type of coverage is important for you as an owner-operator.

C. Trailer interchange

Trailer interchange insurance offers coverage against the physical damages occurring to trailers in an accident. This coverage pays for the damages to the non-owned trailer being pulled or used under a trailer interchange agreement.

D. Medical payment

Medical payment coverage is essential to have for owner-operators. The medical cost is reaching its peak so having this coverage is vital for you. This policy pays for the medical expenses of your drivers and passengers who get injured in an accident.

Occupational Accident Insurance

Also known as workmen compensation coverage. This policy protects your employees from physical injuries that arise in an accident. Your drivers who work for you are an important source of your business’s smooth run. So, you should purchase this coverage to protect them and their families. It pays for the medical expenses for accident death, injuries, and disabilities.

You will find many insurance companies offering these specialized coverages. However, you can save a lot of money on these policies if you purchase them yourself. You can customize your owner-operator insurance according to the level of coverage you need.

Final thoughts

It takes a lot of confidence and a bit of knowledge in trucking to become an owner-operator. You need to take care of many business aspects before commencing your trucking operations like protecting your fleets with the right set of coverage. Whether you are working under a lease or operating under your own authority, you would require the aforementioned coverages for your own good.

Having adequate truck insurance not only provides protection but also affords a great level of mental peace. You can focus on more important things than just worrying about the safety of your trucks. Add these essential add-on coverages to your policy for uninterrupted operations and long-lasting success.

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Arnab is a Passionate blogger. He loves to share sentient blogs on topics like current affairs, business, lifestyle, health, etc. If you want to read refulgent blogs so please follow RealWealthBusiness.

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