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Tuesday, April 23, 2024

Importance of Commercial Truck Insurance and When Do You Need It

If you use trucks for business, own a fleet of trucks, or are an independent truck driver, you need the right insurance policy. With commercial truck insurance, you have something that protect your vehicle, your business, and the public. Even if your business owns a single truck, insurance is crucial to protect your livelihood as well as against significant financial losses.

When opening your trucking company, opting for insurance plans is one of the first things you should do. Note that commercial truck insurance is not the same as commercial auto insurance as the risks associated with hauling large amounts of materials across state lines are different from the ones with a delivery van driving within the city.

Every commercial trucking business needs insurance to cover risks that can occur at any moment. The trucking insurance coverage options are beneficial to have. It helps if you know the types of insurance available for your trucking business:

General Liability Insurance.This covers additional riskssuch as property damage, customer injuries, and advertising injuries. It protects your company from the cost of lawsuits. This insurance is usually required for leases and contracts.

Workers’ Compensation Insurance.It is required by most employers under the law. It coverslost wages and medical expenses for employees for work-related illnesses and injuries. It also protects your trucking business from lawsuits and helps you stay compliant with state regulations.

Physical Damage Insurance.Also referred to as collision coverage, it covers the cost of replacing damaged or fixing tractors or trailers. This type of insurance does not cover damage to drivers’ personal items, cargo, electronics, tools, or any equipment that is not permanently attached.

Trucking Liability Insurance. It is the minimum insurance required, and only covers injuries to damage to other vehicles or other people in the event of an accident. This truck insurance does not cover your driver, your vehicle, lawsuits, etc.

Trailer Interchange Insurance. Under a trailer interchange agreement, it covers physical damage for trailers and usually covers damage brought on by vandalism, collision, theft, andfire. Trailer interchange insurance is most beneficial to the transportation provider, because without it you would be accountable for any financial damages to the trailer.

Bobtail Insurance.Bobtail insurance is liability coverage, which means it will not cover physical damage to an insured’s truck. But it provides coverage when you are bobtailing a truck: operating a truck without an attached trailer or semitrailer. When the driver of a bobtail truck is deemed to be at fault in an accident, bobtail insurance covers injuries suffered by other people, damage to other vehicles, and damage to property involved in the accident. 

Cargo Insurance. Typically, it covers the damage or loss to cargo due toequipment breakdown, collision, theft, fire, and heavy weather. There are some exclusions for certain types of cargo, such as live animals, jewelry, art, and explosive materials.

Commercial truck insurance offers the following are some add-on covers:

Roadside support

Gearbox and engine protection cover

No claim bonus protection

Zero depreciation cover

Loss of revenue cover

Also, it would be smart to know the exclusions from the truck insurance coverage:

Driving without a valid license

Contributory negligence

Drunk driving

Consequential Losses or damages

Why Your Business Should Have Trucking Insurance

Here are themain reasons that you should carry the right insurance for your trucking company:

Helps Keep Business Going. Regular maintenance, unexpected repairs, and fuel costs can put a major dent in your budget. If a driver gets into an accident that damages the truckor anotherproperty, your trucking company could face seriousfinancial liability, potentially putting you out of business. Trucking insurance protects against a wide range of incidents, allowing your business to grow and thrive.

General Liability Insurance Has Exclusions. While general liability insurance covers the medical expenses if someone becomes injured at the company, the cost of property damage claims, advertising injury claims, administrative costs, settlements, and judgments, it does not cover drivers who may have an accident while driving for work. Instead, a trucking policy is necessary to cover driver accidents at delivery locations, bodily injury, damaged property, and other costly incidents.

Reduces Repair Costs to Damaged Trucks. Driving a commercial vehicle, particularly a larger truck, puts the driver and other people on the road at risk for property damage or serious injuries. Truck insurance can protect your company from the cost of expensive repairs for property damage that transpire while operating a truck for work purposes.

While a general liability policy covers damage to other property, physical damage coverage protects damage to your own fleet of trucks. Physical damage coverage can save you a considerable amount of money in the event of a collision or other accident.

It Is a Must to Protect the Cargo. Many businesses use trucks to transport goods from one destination to another. Regardless of what is being hauled, truck insurance can protect valuable cargo.Cargo insurance is a component of trucking insurance that protects the goods being hauled from various scenarios. Loads can come undone, collisions may occur, and vehicle fires can spread quickly, causing catastrophic damage to the vehicle and its contents. The insurance helps cover the cost to replace damaged or lost cargo.

Builds Customer Confidence.

A trucking company that delivers or transports goods to other companies can benefit from carrying transport insurance. With a trucking insurance policy, you can develop a reputation based on professionalism and trust. This is because clients are more likely to work with a company that is protected with sufficient insurance coverage as they know that their goods are in good hands. They feel more comfortable doing business with you if you are financially protected against potential losses.

The Law Requires Insurance. One of the essential reasons to obtain truck insurance is to meet legal requirements. Any business that uses one or more trucks as part of its daily operations will require insurance to protect against damage or injuries to people or property. Also, primary liability insurance is a requirement for acquiring a trucking license.

However, in the event of an accident, a primary insurance policy only covers damage to another vehicle or person. General liability is usually recommended to trucking companies to achieve more expansive coverage in case of a libel claim,false advertising, or lawsuitagainst the company.

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