Important Commercial Truck Insurance Provisions
Posted in Legal Alerts on February 15, 2021
Commercial truck insurance is required for all operators in Florida and can act as a safety net in case an accident occurs. The Federal Motor Carrier Safety Administration (FMCSA) sets minimum requirements for commercial truck insurance. Additionally, each commercial truck driver will have insurance requirements based on the type of vehicle operated, weight of the vehicle, as well as the type of cargo transported. These factors can affect the minimum required coverage. Understanding what is required, as well as any special provisions that can be added, will help ensure adequate trucking insurance coverage in the state of Florida.
In addition to standard federal regulations, trucking and other transportation insurance can have different requirements for different industries. Drivers who are contracted independently or employed by a federal carrier, who transport cargo to and from warehouses, or who deliver our FedEx and Amazon packages must all carry some basic forms of insurance.
Public Liability Insurance Coverage
All drivers and owners of trucking businesses must have multiple types of insurance coverage, including a public liability policy that includes coverage for bodily injury and property damage. Public liability insurance covers truck drivers on a day-to-day basis no matter where they travel in the United States. In order to gain Authority to Operate, each motor carrier must show proof it carries a public liability insurance policy before sending trucks out on the roads. Furthermore, a truck driver in the United States cannot be employed without carrying public liability insurance.
Trucking companies carrying public liability insurance are also covered for other common operating risks that small and large businesses face, including liability coverage related to accidental customer injuries and damage to customer property, as well as potential copyright infringement and false advertising claims, and/or if the company is facing a libel or slander lawsuit.
Public liability insurance policies contain a bodily injury clause, which covers hospital and medical costs in the event of an accident in which the trucking operator was at fault. This portion of the insurance policy takes into account the potential cost of medical bills and associated damages and is the reason why the cost of commercial truck insurance is so high. Within the insurance policy there will also be a specific property damage clause that takes into account damages to other people’s property and any repairs required. As with most insurance policies, public liability insurance for commercial truck operators has minimum limits that differ by state and are heavily regulated to avoid misuse. These minimums are incredibly high due to the potential risks associated with trucking.
Exceptions to Public Liability Coverage
Commercial truck insurance policies do not cover everything associated with operation. Common areas trucking companies need to review for coverage can include:
- Certain type of trucks may not be covered by a public liability policy, including cement trucks, limos, hearses, buses, food trucks, and passenger vans. These vehicles require their own specific insurance policies.
- Protecting truck drivers in the event of accident or injury may require a workers’ compensation insurance policy.
- A public liability insurance policy does not provide financial support for trucks owned by the trucking company that are damaged in an accident.
- If cargo is damaged during transport, public liability insurance does not cover those losses.
- If the business suffers because of a loss of cargo or significant damage to its vehicles, the resulting loss of income is not covered by public liability insurance.
Additional Truck Insurance Options
There are many types of trucking insurance that can provide additional coverage beyond public liability, such as:
Cargo insurance is exactly what it sounds like – insurance that covers the items hauled in a truck or trailer. Cargo insurance is not required by FMCSA; however, many shipping companies will not do business with owner/operators that don’t carry it. It is a good idea to include a cargo insurance policy along with public liability insurance so your company can work with shippers across the country. A typical coverage limit for cargo insurance is $100,000, but that can change depending on the type of cargo being transported.
Physical Damage Policy
Trucking physical damage refers to coverage that protects a vehicle. If you are financing a truck or trailer, add a physical damage policy. This is insurance that protects a truck or trailer from damage – both on the road and due to vandalism and natural disasters, among other causes. For truck owners, it is smart coverage to have because even one accident can become a financial disaster.
A lesser-known policy to consider adding is bobtail insurance. Independent contractors likely need insurance beyond what a motor carrier offers. In most cases, when under dispatch, a trucker is covered by the motor carrier’s insurance; however, once off the clock, they are not. In order to bridge the coverage gap, many independent contractors purchase bobtail or non-trucking liability insurance. Bobtail insurance covers a truck driver and their vehicle when they are not hauling a trailer or other load.
Business Interruption Coverage
If you own a trucking company, having business interruption insurance will be critical to making sure business operations run smoothly in the event your business operations are affected by an accident or injury to your vehicle or driver(s) or another cause.
Serving the Commercial Trucking Industry
Commercial trucking and cargo transport are crucial components of the supply chain in the United States. Truck operators and transportation companies must have the appropriate insurance coverage to operate legally and safely – and to protect them in the event disaster strikes. Our team of insurance coverage lawyers stands ready to discuss insurance requirements and disputes with you.