Owner-Operators and Transportation Insurance

Owner-operators in the transportation industry must carry the proper insurance coverage for the types of jobs they take on, particularly because the brokers and motor carriers they work with often pass the burden of maintaining proper insurance off to them directly.

Insurance agents are such a valuable resource to owner-operator transportation clients.  They have the unique ability to find the best coverage available, avoid any potential exposures, and all at a competitive price.

Here are some questions insurance agents should ask their owner-operator clients:

  • What is their truck’s market value?
  • How much is owed on the truck and to whom?
  • Are they running a long-haul or local-radius operation?
  • What kind of cargo are they hauling?
  • How will the cargo be transported? (e.g. trailer, box truck or personal vehicle)
  • What does the company they work with (broker or end customer) require (or provide) as coverage?
  • What filings and limits are they required to have to satisfy the state or FMCSA?

Coverage for owner-operators falls into several categories:

Truckers General Liability Coverage: To cover the insured’s premises where they have an office or a garage to repair their own trucks.

Primary Auto Liability Coverage: This does not cover the actual truck, but rather the third-party BI/PD claims as a result of an accident.

Physical Damage Coverage: Provides comprehensive or specified causes of loss & collision coverage to repair or replace damage to the insured’s vehicles in the event of an accident, theft, or other covered peril. Lenders require this insurance so the loan balance may be paid off in the event of a total loss. Please note that some insurance carriers will only pay the ACV of the truck, so they need to be aware in the event they are upside down in their loan.

Non-Trucking Liability Coverage: Also known as bobtail or deadhead insurance, provides coverage for damages or injuries to others while the truck is not under dispatch from the company an owner-operator is currently leased on to.  IE: after they have delivered a load and are returning home.  This coverage is often required under the lease agreement by the company the owner-operator is leased on to.

Motor Truck Cargo Coverage: Protects cargo for a variety of exposures – theft, water damage, refrigeration breakdown, debris removal, etc. Be sure to check for exclusions and sub-limits on the cargo coverage form.

Contingent Cargo Insurance: Coverage for a load that is brokered to another motor carrier should their insurance fail to pay for a covered loss. Not every trucking company does brokerage but for the ones who do broker loads, they should carry this coverage.

Trailer Interchange: Covers physical damage losses a non-owned trailer being used under a trailer interchange agreement.

Medical Payment: This covers medical bills if the owner-operator or a passenger is injured while driving or riding in the truck. It’s important to note that this coverage varies from state to state.

Uninsured/Underinsured Motorists: This coverage protects the owner-operator if someone hits them and does not have liability coverage, or adequate liability coverage, to repair the resulting damage.

Jencap specializes in transportation – specifically insuring owner-operator exposures.  We are standing by to guide our agency partners to ask the right questions and provide the appropriate coverage for their client’s unique exposure.

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