Truck drivers must have proper insurance to drive heavy trucks on the highways. When they work for a trucking company the company takes care of the insurance requirements. Drivers who take the leap to become owner/operator truck drivers or small fleet owners become responsible for their own insurance. At that point they must be very knowledgeable about the type of coverage they need. They should discuss various options with insurance agents to determine the type of coverage and the proper amount of insurance required to cover the needs of their new business.
Truck drivers typically begin their trucking careers working for a trucking company. Usually, the next step drivers sometimes take from working as hired drivers for trucking companies is to become owner/operators. They become business owners and purchase or lease their own trucks, trailers and equipment. As opposed to being hired employees, they hire themselves out to other trucking companies to haul freight for them. Choosing to become an owner/operator puts these drivers in control of the loads they haul. It also puts them in control of where they choose to go. Additionally, it allows them to earn more income.
Typically, after working for some time as owner/operators many drivers decide to take the next leap and become small fleet owners. They can start with one or several trucks. They can choose to hire other truck drivers or owner/operators. They could also decide to be the sole driver for their company.
The trucking industry is a highly competitive industry so new owners must have a plan to ensure their success. New trucking company owners must make decisions as to the type of freight they desire to haul and obtain the proper equipment. This could include dry van trailers, flatbed trailers, refrigerated trailers, etc. They also will need to decide if they plan to hire other drivers. These and other factors will determine the type of insurance their business requires.
Regardless of whether drivers decide to become owner/operators or small fleet owners they will be responsible providing all or part of the insurance for their truck, trailer and other equipment. Owner/Operators may have part of their insurance such as primary liability insurance covered through the company they are leased to. However, they may need additional insurance to cover their truck, plus any other equipment they have. Small fleet owners are entirely responsible for the insurance needs of their company.
Insurance options will need to be carefully considered. First and foremost is liability insurance. Federal law requires truckers to have liability insurance to drive on the road. Primary liability insurance is the insurance which protects others on the road. Primary liability insurance protects the financial costs of the victims of accidents such as large medical bills, injury benefits, death benefits and damages done to the other vehicle(s) involved in the accidents caused by you or one of your drivers.
Cargo insurance is the insurance which covers the loss of freight that is in the care, control and custody of the carrier. The amount of cargo insurance needed will be determined by the type of freight to be hauled. Generally, the minimum amount is $100,000. A higher amount may be required for hauling high dollar freight and the amount of cargo insurance obtained should be adjusted accordingly.
Having the proper insurance in place for your business enables you to financially protect your business. You may require extra coverage in addition to liability and cargo insurance. Your insurance agent should advise you accordingly. Take the time to choose your coverage wisely.