Commercial trucking is a demanding industry. The business must be managed just as any other company would be, but you will also have to deal with extensive regulatory law. If you operate Semi-trucks that cross state lines and one of your drivers causes an accident, you may be liable for millions of dollars in damages for both medical bills and property damage. It’s important to know your commercial insurance options and the minimum liability insurance the Federal Motor Carriers Safety Administration requires.
FMCSA Legal Requirements For Truck Drivers
Trucks that weigh over 10,000 pounds and cross state lines carrying freight must carry $750,000 to $5,000,000 of insurance, depending on the type of cargo transported. If they carry non-hazardous freight, they must carry $300,000 of insurance.
If you don’t have this insurance, you won’t be able to obtain authorization. If you let this important policy lapse and you have an accident, you may end up owing so much money that you will be put out of business. If you’re audited by the FMCSA, you may be fined, or you may end up losing your authorization altogether.
What Will This Insurance Policy Cover?
If one of your drivers is responsible for a trucking accident that resulted in injury or death, your insurance should pay for the medical bills of anyone that has been injured in the accident. If there were fatalities in the accident, some liability insurance policies would pay for funeral expenses.
If there are fatalities in an accident, the decedent’s family may sue you for wrongful death. Ensure your wrongful death policy covers both settlements and verdicts for wrongful death. Remember, you’re considered responsible for the actions of your employees. It’s important to make sure your drivers have excellent driving records and that all of their drug tests are negative.
If an injured person cannot work, a trucking company’s insurance should compensate them for lost wages. An injured person may seek money for pain and suffering. Pain and suffering is a legal term that means non-monetary compensation. If a person is permanently disfigured or disabled from an accident, either mentally or physically, A trucking company may have to pay them for their pain and suffering.
Trucking insurance policies will also cover any damage that one of your drivers does to a vehicle. In the case of a trucking accident, more than one vehicle is often damaged. A truck accident may result in damage to a building or destruction of the road itself.
What Will Liability Insurance Not Cover?
Liability insurance would not cover damage to your truck if your driver were responsible for the crash. You’ll need to get physical damage insurance to cover repairs. Even if an accident is not your driver’s fault, you will still need physical damage insurance. An ordinary driver is unlikely to have the insurance necessary to pay for a damaged semi-truck.
Read Your Contract
Some liability policies will cover cargo that has spilled on the road, and other policies will not. Be sure to read anything you sign very carefully and ask questions about what you do not understand. If a liability policy does not cover the removal of spilled cargo, you should get a cargo insurance policy that will.
When cargo spills onto the highway, it can take a long time to clean up. Roads may have to be shut down, and traffic may be rerouted. A municipality or state may seek compensation from a trucking company when an accident causes their employees to do extra work or work overtime.
Be sure to ask your insurance salesperson to find a policy that will cover you if you’re sued by a business or government entity.
Who Should I Go to For Insurance?
Buy your insurance from a company that specifically focuses on the trucking industry. Some compliance companies also offer insurance. It’s probably best to go for a company that offers more than one service. That way, you won’t have to deal with multiple contracts, and you’ll save time and money.
You should always bundle your policies. In addition to liability insurance and physical damage insurance, You will need cargo insurance and general liability insurance as well. If your truck drivers ever take their vehicles home, you will need to get bobtail insurance.
Running a trucking business can be fun and exciting. It can also be very stressful. If you know what kind of insurance to get, your company will be protected in the worst circumstances.