Another year is coming to a close soon and we want to start by saying Thank You to all our clients. Fortunately, insurance pricing, while still expensive, continues to stay close to the lower end of the spectrum. We hope all of our clients have seen some help on their bottom line as a result. As always, we will continue to search the marketplace for the best coverage and pricing available on your behalf.
We regularly receive calls from truckers, especially owner operators that want to know what insurance they are required to have, and what other coverage they should get to protect their business. The following is a basic explanation that we hope will be helpful to both the owner operator and the motor carrier:
INSURANCE – It’s the law. According to FMCSA requirements, motor carriers have to be covered with the proper amounts of auto liability insurance and relevant cargo insurance to be in compliance with federal and or state regulations.
There are lots of different employment situations for commercial truck drivers: those that work independently and contract themselves out vs. those that work for motor carriers. In different instances, the burden of financial responsibility falls on either the operator or motor carrier.
By definition, a motor carrier is a transporter of some sort licensed by the FMCSA. They transport goods or even passengers on a for-hire basis of some kind. Some motor carriers own their own commercial trucks, but in some cases they will contract out independents that own and operate their own commercial trucks.
For the OWNER OPERATOR, we have some simple tips to make sure that your rig is covered:
Non-Trucking Liability or “Bob Tail” Insurance:
In general, an independent owner/operator will not need their own primary liability coverage. In most cases, the motor carrier will provide this within the lease contract. From dispatch to delivery, the motor carriers’ fleet liability will be extended to the owner operator’s tractor.
When the owner is not under dispatch, it is important to carry Non-Trucking Liability, also called Bobtail insurance. Examples of this may include washing or performing maintenance on the truck, or while driving recreationally. ***** Most motor carriers require proof of Non Trucking Insurance to complete the lease contract.
Physical Damage:
Most motor carriers will not provide Physical Damage (also known as collision coverage) for the leased driver. Physical Damage can be purchased by the owner operator independently. While it is not a requirement by the motor carrier, it is beneficial to any driver that could be at a financial loss from the event of an unexpected accident to protect their investment.
Motor Truck Cargo
Oftentimes the independent owner/operator is covered under their employer’s cargo insurance, again this would be underwritten within the lease contract. In the event this is not available, an owner, within his authority with the FMCSA can apply for Motor Truck Cargo coverage. These policies are generally customized and written to cover goods they are hauling for contract employers in the event of spoilage or accidents.
We hope this blog will help provide a better understanding for those searching the web for an explanation of the requirements or coverages that are available for Owner Operators.
Again, we thank you for your patronage, and wish you and yours a very Happy Holiday season!
Regards,
Carrie Beth Kessinger
Client Relations
Alexander & Alexander, Inc.