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Owner Operator Insurance Policy Information

Owner Operator Insurance

Owner Operator Insurance. If you own or operate a truck, then you need insurance that mitigates your risks and protects you from liability. Owning and operating your own truck can be a wonderful way for an entrepreneur to make a good income. With owning a truck comes freedom of being one's own boss, making it a worthwhile occupation for many owner operators. However, the need for insurance is an essential operating expense.

Owner operators can make a substantial living from their businesses. According to the U.S. Bureau of Labor Statistics, the opportunities for owner/operators are poised to grow in (2024). Most truckers bring home around $58K per year, although many make more.

Most owner operators have invested a princely sum in their vehicles, and protecting them with the right level of insurance coverage is essential to the ongoing success of the small owner-operator or owner operators with multiple trucks.

While clearly this field is one that's rewarding, owner operators must protect their assets in the event that a theft or accident occurs. With the immense cost of buying a truck or fleet of trucks, it only makes sense to protect your investment with an adequate level of coverage. If an accident or theft occurs, specialized truck insurance is a godsend.

Protecting your business to the fullest requires that you buy a sufficient amount of owner operator insurance for your trucks.

Owner operator insurance helps your business cover costs from an accident if you or an employee is found liable - with rates as low as $57/mo. Get a fast quote and your proof of insurance now.

Below are some answers to commonly asked owner-operator insurance questions:


What Is Owner Operator Insurance?

Owner operator insurance is a type of insurance specifically designed for individuals who own and operate their own commercial vehicles. This can include truck drivers, delivery drivers, and other types of independent contractors who use their own vehicles to conduct business.

The insurance coverage provided by owner operator insurance can vary depending on the specific policy, but generally includes protection against liability, physical damage, and cargo damage. Liability coverage protects the policyholder from financial loss if they are found to be at fault for an accident that causes injury or property damage to another person or vehicle.

Physical damage coverage provides protection for the policyholder's own vehicle in the event of an accident or other covered event. Cargo damage coverage protects the policyholder's cargo or freight in the event of damage or loss while in transit.

In addition to these standard coverages, owner operator insurance policies may also include additional options such as non-trucking liability coverage, occupational accident coverage, and bobtail coverage. Non-trucking liability coverage provides protection for the policyholder when they are operating their vehicle for personal use, rather than for business purposes.

Occupational accident coverage provides coverage for medical expenses and lost wages if the policyholder is injured on the job. Bobtail coverage provides protection for the policyholder's vehicle when it is not hauling a trailer.

Overall, owner operator insurance is an essential part of running a successful commercial vehicle business. It provides protection for the policyholder's vehicle, cargo, and financial well-being in the event of an accident or other covered event.

How Much Does Owner Operator Insurance Cost?

The average price of a standard $1,000,000/$2,000,000 General Liability Insurance policy for small owner operator trucking businesses ranges from $57 to $159 per month based on location, size, payroll, sales and experience.

Although it's difficult to estimate, the following ranges are common:

  • Primary liability insurance. This type of insurance starts at around $5K per year, but can be significantly more.
  • Non-trucking liability coverage. This coverage starts at around $450 per year.
  • Cargo insurance. Expect to pay around $1K annually.
  • Physical damage insurance. Plan on paying around $2.5K.

Why Do Owner Operators Need Insurance?

Owner Operator Truck Driver

Owner operators, or individuals who own and operate their own commercial vehicles, need insurance for a variety of reasons. Firstly, it is a legal requirement in most states for commercial vehicles to have insurance coverage. Without insurance, owner operators can face hefty fines or even legal penalties.

Secondly, insurance provides financial protection for the owner operator in the event of an accident or other unforeseen incident. Without insurance, an owner operator could be faced with significant financial losses in the event of a collision or other incident that damages their vehicle or injures someone else.

Thirdly, insurance can protect the owner operator from liability claims made by third parties. For example, if someone is injured in an accident caused by the owner operator, they may sue for damages. Insurance can help cover the costs of defending against these claims and any resulting settlements.

Finally, insurance can also help an owner operator protect their business from other types of losses, such as theft or damage to cargo. This can help keep the business running smoothly and prevent costly interruptions.

Overall, insurance is a crucial aspect of operating a commercial vehicle for an owner operator. Without it, they can be exposed to significant financial, legal and business risks.

What Type Of Insurance Do Owner-Operators Need?

States vary widely in the amount of insurance required from owners of large trucks, tractor trailers and semis. Check your state to be sure you're fully insured and legal on the road. Based on your situation, you may need to purchase added coverage. Some other additional coverage options include:

  • Physical damage policy. This type of coverage is likely required by your lender if you finance your truck, and when required, usually is required for the loan's term. You will have to pay premiums typically amounting to around 5 percent or so of the value of the truck, but your rate can be also based on your driving history. If your record is not so great, the cost of your policy will likely cause more. If your truck is involved in an accident, the insurance company will depreciate its value when determining a payout.
  • Gap coverage. If you owe a lot on your vehicle, you should consider purchasing gap insurance. Like the name indicates, it bridges the gap between what you owe and what your vehicle is worth. In other words, if you total out the truck and still owe your lender for it, the difference in what the insurance company is willing to pay and what you owe is covered by gap insurance instead of coming out of your pocket.
  • Equipment policies. Add this type of policy to your insurance to cover things like electronic equipment, tarps and other items that you add as after-market additions to your truck.
  • Bobtail insurance. If you drive the truck without the trailer attached, this type of insurance covers any liabilities you face on the road if you were to collide with another vehicle or object.
  • Cargo coverage. The U.S. government mandates the purchase of $5K or more in cargo coverage for the shipments you haul. Shippers and clients may require a higher level, depending on what you're actually hauling.
  • Non-trucking liability coverage. If you are driving your truck outside the realm of conducting business, this coverage protects you from liability in the event of accident or injury.
  • Occupational accident coverage. This protection supplements your employee's worker's comp benefits and provides other benefits such as accidental death and dismemberment coverage.
  • Non-owned trailer. If you are using a trailer that does not belong to you, this type of coverage is essential to covering any damages that occur.

What Are The Insurance Requirements For Tractor-Trailer, Semi-Truck & Other Commercial Vehicle Owner-Operators?

If you are a commercial vehicle owner, federal law requires that you maintain a minimum of $750K in liability insurance coverage.

Since an accident in a large truck like a tractor trailer can potentially cause a significant amount of damage, some experts recommend that truck owners buy $5 million in coverage. It is always better to have more than you need than to have less than you need if a bad accident occurs.

The driver of your truck, if you lease it out to someone else, is responsible for carrying liability coverage on the truck. Still, if the responsible party does not carry insurance in a sufficient amount to cover an incident, you may need to buy owner operator insurance yourself to ensure that you are not left holding the proverbial bag if an accident occurs.

Consult with a licensed agent to determine if you should purchase additional owner operator insurance to mitigate your risks.

What Does Owner Operator Insurance Cover & Pay For?

Owner Operator Insurance Claim Form

Owner-operators can face various legal issues that can lead to lawsuits. Here are some examples of why owner-operators are sued and how insurance can protect them:

  1. Accidents: Owner-operators are at risk of being sued if they cause an accident that results in property damage or bodily injury. Insurance can help pay for the damages and any legal fees associated with the lawsuit.
  2. Cargo claims: If the cargo being transported by the owner-operator is lost or damaged, the owner-operator could be sued for the value of the cargo. Insurance can cover the cost of the cargo and any legal fees associated with the lawsuit.
  3. Non-delivery of goods: If the owner-operator fails to deliver the goods on time, the shipper could sue them for breach of contract. Insurance can cover the cost of the goods and any legal fees associated with the lawsuit.
  4. Employment-related claims: Owner-operators could be sued by their employees for various reasons, such as discrimination or wrongful termination. Insurance can cover any legal fees and damages associated with the lawsuit.
  5. Property damage: Owner-operators could be sued for damaging property, such as hitting a building or a parked car. Insurance can cover the cost of the damages and any legal fees associated with the lawsuit.

In summary, insurance can help protect owner-operators from lawsuits by providing coverage for damages and legal fees. It's essential to have proper insurance coverage to mitigate the financial risks of operating a commercial trucking business.

Insurance Classification Of Truckers

Insurers classify trucking businesses using several coding systems. You can wind up paying more for your insurance if your trucking company is not properly classified - like a general freight carrier being coded as a hazmat carrier. Below are the three most commonly used coding systems for truckers insurance:

  • SIC CODES: 4212 Local Trucking without Storage, 4213 Trucking, Except Local, 4214 Local Trucking with Storage
  • ISO General Liability Codes: 99793
  • NAICS CODES: 484110 General Freight Transit, Local, 484121 General Freight Transit, Long-Distance - Truckload, 484122 General Freight Transit, Long-Distance-Less than Truckload, 484220 Specialized Freight (except Used Goods) Transit, Local, 484230 Specialized Freight (except Used Goods) Transit, Long-Distance
  • Suggested Workers Compensation Codes: 7228, 7229, 7230, 7231, 7232.

Description for 4212: Local Trucking without Storage

Division E: Transportation, Communications, Electric, Gas, And Sanitary Services | Major Group 42: Motor Freight Transportation And Warehousing | Industry Group 421: Trucking And Courier Services, Except Air

4212 Local Trucking without Storage: Establishments primarily engaged in furnishing trucking or transfer services without storage for freight generally weighing more than 100 pounds, in a single municipality, contiguous municipalities, or a municipality and its suburban areas.

  • Baggage transfer
  • Carting, by truck or horse drawn wagon
  • Debris removal, local carting only
  • Draying, local: without storage
  • Farm to market hauling
  • Furniture moving, local: without storage
  • Garbage, local collecting and transporting: without disposal
  • Hauling live animals, local
  • Hauling, by dump truck
  • Local trucking, without storage
  • Log trucking
  • Mail carriers, bulk, contract: local
  • Refuse, local collecting and transporting: without disposal
  • Rental of trucks with drivers
  • Safe moving, local
  • Star routes, local
  • Truck rental for local use, with drivers
  • Trucking timber

Description for 4213: Trucking, Except Local

Division E: Transportation, Communications, Electric, Gas, And Sanitary Services | Major Group 42: Motor Freight Transportation And Warehousing | Industry Group 421: Trucking And Courier Services, Except Air

4213 Trucking, Except Local: Establishments primarily engaged in furnishing "over-the-road" trucking services or trucking services and storage services, including household goods either as common carriers or under special or individual contracts or agreements, for freight generally weighing more than 100 pounds. Such operations are principally outside a single municipality, outside one group of contiguous municipalities, or outside a single municipality and its suburban areas.

  • Long-distance trucking
  • Over-the-road trucking
  • Trucking rental with drivers, except for local use
  • Trucking, except local

Description for 4214: Local Trucking with Storag

Division E: Transportation, Communications, Electric, Gas, And Sanitary Services | Major Group 42: Motor Freight Transportation And Warehousing | Industry Group 421: Trucking And Courier Services, Except Air

4214 Local Trucking with Storag: Establishments primarily engaged in furnishing both trucking and storage services, including household goods, within a single municipality, contiguous municipalities, or a municipality and its suburban areas.

  • Furniture moving, local: combined with storage
  • Household goods moving, local: combined with storage
  • Trucking, local: combined with storage

Owner Operator Insurance - The Bottom Line

Reduce your premiums by accepting higher deductibles or working with your agent to find discounts for which you qualify. Ask your agent to comparison shop for you to find a policy that is a blend of the protection you need and a budget you can afford.

Additional Resources For Commercial Auto Insurance

Learn about small business commercial auto insurance which includes liability and physical damage protection for vehicles that are used for business purposes.


Commercial Vehicle Insurance

Commercial auto insurance is a type of insurance that provides coverage for vehicles used for business purposes. This includes vehicles such as delivery trucks, company cars, and other vehicles that are used to transport goods or employees.

Commercial auto insurance is necessary for businesses that rely on their vehicles to conduct their operations. It helps to protect the business from financial losses due to accidents, theft, or other unexpected events. It also helps to protect the business from potential lawsuits that may arise from accidents involving their vehicles.

There are several types of coverage options available under business auto insurance policies. These include:

  • Liability coverage, which covers damages or injuries that you or your employees cause to others while operating a business vehicle.
  • Physical damage coverage, which covers damages to your own vehicle, is also available.
  • Other coverage options may include medical payments, uninsured or underinsured motorist coverage, and rental reimbursement.

It is important for businesses to carefully consider their commercial auto insurance needs and to choose a policy that offers the right level of coverage. This can help to ensure that the business is protected in the event of an accident or other unexpected event.

Minimum recommended small business insurance coverage: Building, Business Personal Property, Business Income and Extra Expense, Accounts Receivables, Computers, Motor Truck Cargo, Valuable Papers and Records, Employee Dishonesty, Money and Securities, General Liability, Employee Benefits, Umbrella, Motor Carriers Liability and Physical Damage, Hired and Non-owned Auto & Workers Compensation.

Other commercial insurance policies to consider: Earthquake, Flood, Mobile Equipment, Signs, Warehouse Operators' Legal Liability, Cyber Liability, Employment-related Practices, Environmental Impairment, Underground Storage Tank, Stop Gap Liability and International Coverages.


Public Utilities Commission (PUC) Information

  • PUC - Regulated Transportation - The PUC regulates motor carriers that transport property, passengers or household goods as well as brokers of passenger transportation between points in for compensation. Property carriers (e.g., trucking companies) and charter bus carriers (seating capacity of more than 15) are regulated for safety and insurance requirements only.

Federal Motor Carrier Safety Administration Information

  • Federal Motor Carrier Safety Administration (FMCSA) - The Federal Motor Carrier Safety Administration's primary mission is to prevent commercial motor vehicle-related fatalities and injuries.
  • Safer System - The FMCSA Safety and Fitness Electronic Records (SAFER) System offers company safety data and related services to industry and the public over the Internet. Users can search FMCSA databases, register for a USDOT number, pay fines online, order company safety profiles, challenge FMCSA data using the DataQs system, access the Hazardous Material Route registry, obtain National Crash and Out of Service rates for Hazmat Permit Registration, get printable registration forms and find information about other FMCSA Information Systems.
  • FMCSA Forms - All forms needed for the Federal Motor Carrier Safety Administration.
  • Update MCS 150 - Form MCS-150 and Instructions - Motor Carrier Identification Report.
  • How does CSA work? - CSA (Compliance - Safety - Accountability) re-engineers the former enforcement and compliance process to provide a better view into how well large commercial motor vehicle carriers and drivers are complying with safety rules, and to intervene earlier with those who are not.

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