Embroker Team March 18, 2024 8 min read

Commercial Truck Insurance Coverage: What You Need, Cost & More

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According to a report by the American Trucking Associations, trucks transported 10.23 billion tons of freight (primary shipments only) in 2020, accounting for 72.5% of total transported weight in the U.S. only. Since the report also indicates that trucks are the primary transportation method between the U.S. and its neighbors, Canada and Mexico, we can say without a doubt that the trucking industry is essential for U.S. freight transportation.

The same report also shows that the trucking industry employed 3.36 million truck drivers in 2020 and 7.65 million people in industry-related jobs. Given that all this attests to how vital the trucking industry is, it’s no wonder that insurers provide specialized commercial truck insurance coverage to protect these companies, business owners, and employees.

Let’s consider the amount of risk trucking companies face in their everyday operations, especially when it comes to drivers out there on the roads. Apart from accidents, there is also the risk of a mechanical breakdown that could cause long shipment delays or even cause the cargo to go bad. Also, severe weather conditions can damage your vehicles and make it impossible for you to conduct your operations. 

When we look at all that, it’s almost unimaginable that any business owner would leave their company unprotected. That’s why it is vital to find adequate policies and customize the coverage to your company’s needs.

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What Is Commercial Truck Insurance?

Commercial truck insurance is a type of insurance that specifically covers trucks or large vehicles used for business purposes. This includes both tractor-trailers and other types of commercial trucks, such as:

  • Garbage trucks
  • Delivery trucks
  • Cement mixers
  • Tow trucks
  • Other commercial trucks

Broadly speaking, commercial truck insurance is a part of auto insurance designed for commercial truckers and transportation businesses. Depending on the type of business you run, you might need various policies to provide financial and legal support for all the liabilities you could face. 

Commercial truck insurance typically provides coverage for damages caused to the truck and liability in the event that the truck causes injuries or property damage. Also, policies exist that cover lost or damaged cargo, and they are particularly significant if the load you transport is valuable. 

If you own or operate a commercial truck, it is vital to make sure you have adequate insurance coverage. They will protect your company in the event of an accident or other incident involving your truck. You should note that insurance policies also list and cover your drivers when driving trucks for business transportation purposes.

Who Needs Commercial Truck Insurance?

If any of these apply to you, you should ensure you have adequate insurance coverage:

  • You own or operate a commercial truck.
  • Your truck is used for business purposes.
  • You transport cargo or passengers in your truck.
  • You are a trucking contractor.
  • You are required to have commercial truck insurance by your state.

Every business that owns and uses a truck for commercial purposes should strongly consider purchasing commercial truck insurance. Whether you own a fleet of trucks or one single truck you use to work as a contractor, the risk of suffering an unfortunate event that could cause severe financial damage is very real.

It is hard to imagine any business owner would keep their trucking company and employees unprotected on the road. Accidents that could lead to driver injury or damaged vehicles happen all the time, and both you and your employees need to feel reassured that your insurance policies would help minimize the damage.

Unpredictable circumstances could also damage the cargo you are transporting, and you could end up with a huge bill from your customer, asking you to reimburse their losses. Also, your customer could slip on an oil spill in your garage when inspecting your vehicles and decide to sue you for medical costs.

What Types of Companies Use Commercial Truck Insurance?

Businesses that purchase commercial truck insurance typically fall into these categories:

  • Owner-operators: If you own a truck and work under your own authority, your insurance needs would be different than those of owner-operators with a lease contract with a motor carrier.
  • Motor carriers: These businesses either have their vehicles or hire owner-operators to transport their cargo. Your insurance needs will vary depending on the type of your business.
  • Private carriers: If you use your private vehicle to transport goods for your company or another employer, you should consider buying private carrier insurance.

Ultimately, if you are unsure if you need commercial truck insurance, you can always check with your state’s Department of Motor Vehicles or contact an insurance agent who can assist you with your insurance needs.

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What Types of Coverage Do You Need?

Your commercial truck insurance coverage needs depend mostly on your unique risk exposures and business characteristics. However, there are some policies that experts recommend all trucking businesses should consider buying to protect their operations:

Commercial Auto Liability Insurance

Commercial auto insurance is also known as business auto insurance, commercial vehicle insurance, or, in some instances, truck insurance. It’s important to note that truck insurance actually encompasses multiple policies, but auto insurance is part of comprehensive coverage.

A commercial auto insurance policy provides coverage for bodily injury claims, as well as property damage and medical payments in the event of a collision that injures people or causes property damage. It also protects your vehicles from losses related to theft, vandalism, specific weather conditions, and crashes. 

A commercial auto policy is different than personal auto insurance because exposures are different and significantly greater in the commercial trucking environment.

Although a commercial auto insurance policy is designed to protect you and your assets as the business owner, it also protects your workers and any other hired drivers who operate for commercial reasons.

Physical Damage Insurance

Physical damage insurance for your commercial truck is an important protection to have in case of any kind of physical damage to your vehicle. This type of insurance will help cover the cost of repairs or replacements and any other expenses that surface, such as a rental car while your vehicle is in the repair shop.

It doesn’t matter if the vehicle is out on the road or sitting in the garage or a parking lot—unplanned events happen all the time, and they can damage your vehicle. Imagine a sudden storm in the middle of summer, walnut-sized hail in your area, and your truck is outside in the company parking lot. The damage to the roof and windows is almost inevitable, but you can rely on physical damage insurance to cover at least some of your costs.

Motor Truck Cargo Insurance

Motor truck cargo insurance is a type of insurance that covers the goods being transported in a commercial truck. This policy differs from the insurance that covers the truck itself and protects the trucking company if the transported goods are damaged, lost, or stolen.

If a catastrophe strikes, like a fire or collision, this coverage protects the freight a for-hire trucker hauls from one location to another. While the cargo is in transit, truckers are responsible for ensuring they carry the right insurance.

Motor Truck General Liability Insurance

Motor truck general liability insurance protects the trucking company if someone is injured or property is damaged due to the company’s negligence. Most states and risk managers typically require this type of insurance for any commercial truck company.

For example, if a customer or a third-party contractor slips and falls on your premises, they can sue your company for the medical bills and lost wages if they aren’t fit to work for a while after the incident. Your general liability insurance would respond to such claims alongside third-party property damage, libel, or slander claims.

Non-Trucking Liability Insurance

Non-trucking liability insurance covers your trucking company similarly to motor truck general liability insurance, but when you use your vehicle for a non-business purpose. This coverage is particularly important for truckers who use their vehicle to run errands or drive their friends with large suitcases to the airport, for example.

Note, however, that non-trucking liability insurance usually does not provide coverage if you transport cargo in your vehicle.

Rental Reimbursement with Downtime Coverage

If you or one of your drivers damaged a truck in an accident and you couldn’t get it back on the road for some time, you’d want to ensure your business can survive the downtime. Rental reimbursement with downtime coverage is a type of insurance that reimburses your trucking company for the cost of renting a replacement truck while your vehicle is out of order.

As the policy name says, you can also choose for your insurer to compensate you for the downtime instead of helping you rent another vehicle.

How Much Does Commercial Truck Insurance Cost?

A few things affect how much commercial truck insurance will cost. These include:

  • The size of your trucking company’s operations: Plain and simple: the bigger your company and the more vehicles you have, the higher your insurance premiums.
  • Your business location: Laws and commercial truck insurance rates vary from state to state, as do insurance premiums. Also, let’s suppose you operate across state borders. In that case, you can expect to pay more for your insurance policies because your exposures are greater than those companies operating locally on shorter-distance transport routes.
  • The type of goods you transport: Heavy-weight cargo can inflict more damage than lighter cargo if you suffer an accident; hence, there is a higher insurance premium for companies transporting the more dangerous goods. Note that you might need special coverage if you transport livestock or pharmaceuticals, for example.
  • Type of vehicle(s) you use: Some vehicles cost more to insure than others, usually longer ones. You can also expect to pay higher premiums for newer vehicles as they cost more to repair.
  • The number of accidents your company has had in the past: Your claims history and driving records will play an important role in determining the premium of some of your commercial truck insurance policies.
  • Amount of coverage and the deductible you choose: Increasing your policy limits undoubtedly affects your premium. You can lower it by selecting a higher deductible, which means you would have to pay more if a claim occurs.

Commercial truck insurance premiums can vary significantly based on the named factors. Also, if you need additional coverage and the people you work with require higher limits on your policies, you can expect to pay up to 50% or more than you would for regular coverage.

However, you should be aware that the cost of not having adequate insurance policies could be considerably higher if you had to pay for all the repairs and damages by yourself. That’s why having insurance as a safety net could prove crucial for the well-being of your trucking business.

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