Trucking Coverage FAQs
What Coverage Do You Need For Your Trucking Business
1. Vehicle liability insurance
Vehicle liability insurance has two components always included together: Bodily Injury
coverage and Property Damage coverage.
Vehicle liability insurance is the basic insurance coverage that covers injuries or
damage to other people or property if you’re at fault for an accident.
If you cause an accident that injures or even kills another person, the Bodily Injury (BI)
portion of your Liability insurance will pay for the related expenses. Bodily Injury (BI) will
cover hospital and medical bills, rehabilitation, long-term nursing care, funeral
expenses, lost earnings, pain and suffering, and other expenses, up to the limits you
select.
If you cause an accident that damages another person’s property, the Property Damage
(PD) portion of your Liability insurance will pay for the related expenses. Property
Damage (PD) will cover the expense to repair or replace damaged items, including
other vehicles, lamp posts, houses or even a pet, up to the limits you select.
Liability insurance also will pay for your legal defense costs if you are sued as a result of
your involvement with the accident.
Who needs liability insurance?
Anyone who drives a vehicle needs Liability insurance. In most situations, Liability
insurance is required by law.
2. Motor Truck Cargo Insurance
Motor Truck Cargo insurance (Cargo) provides insurance on the freight or commodity hauled by a
For-hire trucker. It covers your liability for cargo that is lost or damaged due to causes such as fire,
collision, or striking of a load.
Who needs motor truck cargo insurance?
A growing number of risk managers require truckers to insure their cargo. You can meet that requirement
with Motor Truck Cargo Insurance. It pays when you are responsible for damage to or loss of the cargo
due to fire, collision or even hitting or running over the cargo that you transport on behalf of a client.
Limits, deductibles, and other details
When you select Motor Truck Cargo insurance, you have to select a limit for your coverage. This limit
determines the maximum amount your insurance company will pay for damaged or destroyed cargo. You
also need to choose a deductible. A deductible is the amount you agree to pay out of pocket when you
have a claim. Choosing a higher deductible is an easy way to lower the price of your insurance, but be
sure you choose a deductible that you can afford to pay out of pocket at any time.
3. Workers Compensation vs. Occupational Accident Coverage
What Is Workers Compensation?
Workers Comp is a state-regulated and state-mandated insurance which covers costs
associated with a worker’s injury on the job. This can include medical bills, lost wages,
legal fees, and ongoing care after an injury. It’s the employee’s responsibility to submit a
claim for coverage, which may be done at the time of the accident or after the fact. Each
state has different laws surrounding Workers Comp limits and qualifying factors.
Employers are typically required to carry a Workers Comp policy if they have a certain
number of employees or if the employees work more than a certain number of hours per
week- laws vary by state. Workers Compensation policies are more expensive than
Occ/Acc, since the coverage limit is determined by state laws and not the employer’s
discretion.
What Is Occupational Accident Insurance?
Occupational Accident insurance provides more limited coverage than Workers Comp,
and therefore is less expensive than Workers Comp. Occ/Acc covers medical bills, lost
wages, and death benefits when a worker is injured on the job. Policy holders are able
to select the amount of coverage they want based on perceived risk.
Occ/Acc can bridge the gap between full-time employees covered under a state’s
Workers Comp laws, and owner-operators leased on to motor carriers. Owner-operators
are considered to be independent contractors and are therefore not covered by most
Workers Comp laws. They do, however, have the right to pursue legal action in the case
of an injury. Selecting an Occ/Acc policy with sufficient coverage helps to protect
trucking companies against legal action, but will not cover associated legal fees like
Workers Comp would.
When deciding which policy is right for you, consider the following questions:
- Are your workers full-time employees or independent contractors?
- How expensive is Workers Comp in your state?
- Does your state allow you to provide either Workers Comp coverage or Occ/Acc?
- Which option would be less expensive?
- Does the lower cost of Occ/Acc outweigh the potential legal costs of a lawsuit?
As always, the agents at PillarIA are available to help you determine which policy will
provide the best coverage for your insurance needs. Make sure you get the best policy
for the best price- contact us today!
Contingent Liability
WHAT IS MOTOR CARRIER CONTINGENT LIABILITY INSURANCE?
As a motor carrier you need to ask yourself:
Q: How do I protect myself against an independent owner operator who sues me for workers
compensation claiming to be a full-time employee?
A: You need Motor Carrier Contingent Liability Insurance.
Q: What is Motor Carrier Contingent Liability Insurance?
A: Simply, if an independent owner operator semi driver who carries cargo for you tries to collect
workers compensation from your policy, contingent liability insurance helps you defend your lease
agreement and also your cost if the owner operator is successful in his claim.
HOW CAN AN INDEPENDENT SEMI DRIVER CLAIM TO
BE MY EMPLOYEE AND FILE A WORKERS
COMPENSATION CLAIM?
As a motor carrier who leases on independent owner-operator semi truck drivers to carry cargo, it
appears obvious they are not a full time employee of yours.
But sometimes things happen that change the dynamic. For instance, what if the owner operator
has an accident , is injured and can’t work? That semi truck driver might decide to sue you for
workers compensation, claiming they are a full time employee of your trucking company.
You think there’s no chance a court or arbitrator will side with the independent semi driver. But
consider an independent contractor supposedly does all the following things:
- Drives for other motor carriers
- Uses his own semi truck, tools, and equipment
- Hires and pays assistants
- Sets his own work schedule
- Makes profits or suffer losses
- Has a registered business license
If any one of these are proven not to be true, a court or arbitrator could side with the semi driver
and force you to pay worker’s compensation.
FedEx learned the hard way about this issue. In 2014, the 9th Circuit Court in California ruled that
2,300 independent semi drivers were in fact FedEx employees and entitled to workers
compensation benefits. The ruling cost the company millions.
This is why you want to buy Motor Carrier Contingent Liability Insurance.
4. PHYSICAL DAMAGE TRUCKING INSURANCE
WHAT IS PHYSICAL DAMAGE SEMI TRUCK INSURANCE?
Experienced truckers know they have to be prepared for any event that could put their
commercial truck and their livelihood out of commission. That includes everything from
an accident to fire, foul weather, theft to vandalism.
The best way to be prepared for the unexpected is to make sure you’re covered with
Physical Damage Insurance. This trucking insurance, which is offered by the trucking
insurance experts at pillaria.com, protects your truck and trailer 24/7 and helps get you
back on the road.
WHAT DOES PHYSICAL DAMAGE SEMI TRUCK INSURANCE INCLUDE?
Comprehensive
- Fire or explosion
- Theft
- Windstorm, hail, earthquake, flood
- Vandalism and more
Collision
- Damage caused by collision with another object
- Deductible options range from $500 – $5,000
When you consider buying Physical Damage Semi Insurance, there are a number of
add-on options to choose from. They include:
- Towing- usually included as a sub-limit
- Storage- usually included as a sub-limit
- GAP coverage- can pay off loan if your truck is totaled and the appraised value is less than the payoff amount
- Federal Excise Tax coverage- if loss occurs within one year of date of purchase, the tax amount will be reimbursed
- Personal effects coverage- can be added to cover personal items kept in commercial vehicle
- Electronic equipment coverage- can be added to provide coverage to electronic items that are permanently mounted in commercial vehicle
- Downtime/Rental reimbursement- can be added to provide coverage if covered loss results in use of vehicle being lost for more than 7 day