Three Reasons to Get Commercial Truck Insurance
If you find yourself involved in the trucking industry or operating commercial trucks, it’s imperative to recognize the paramount significance of obtaining commercial truck insurance this year. In 2023, there are three compelling justifications why this type of insurance coverage is an absolute necessity for you:
1. Heavy Cargo Trucks Get into a Lot of Accidents
Despite being among the key drivers of national revenue growth, the trucking sector is burdened by a concerning number of road casualties. The absence of adequate insurance coverage to shield against financial losses resulting from road accidents, cargo damage, and theft could propel your business toward untimely insolvency.
According to the findings of the Insurance Institute for Highway Safety (IIHS), a notable 11% of motor accident fatalities in the United States are attributable to large trucks colliding with other vehicles and pedestrians on highways, roads, and streets.
Additional risks commonly faced by commercial trucks include:
- Truck Driver Fatigue: The demanding nature of the trucking profession can lead to driver fatigue, significantly increasing the likelihood of road accidents.
- Traffic Flow: Navigating through congested traffic poses a continuous challenge, exposing trucks to potential collisions and disruptions.
- Cargo Vulnerability: The susceptibility of cargo to theft, vandalism, and damage poses a serious threat to a trucking company’s assets and reputation.
- Natural Perils: Trucks are not immune to the forces of nature, and occurrences like windstorms, rain, hailstorms, etc., can damage vehicles and their precious cargo.
Recognizing the indispensable role of the trucking industry in the overall economy, insurance companies have tailored commercial truck insurance policies to address the unique safety requirements of truck owners and operators. This specialized coverage aims to provide protection and financial security amidst the diverse risks faced by the industry.
As a responsible truck owner or operator, procuring comprehensive commercial truck insurance is not only a prudent measure but also a legal necessity in many cases. Embracing the right insurance ensures that you can confidently navigate the challenges of the industry, securing the longevity and prosperity of your esteemed trucking ventures.
2. Commercial Truck Insurance is Mandatory
Operating your commercial fleet without sufficient insurance is strictly prohibited by the Federal Motor Carrier Safety Administration (FMCSA). To ensure proper monitoring and regulation, the FMCSA allocates a unique Department of Transportation (DOT) number to each registered commercial vehicle. However, failure to provide valid insurance documentation will lead to the withholding of your DOT number, effectively preventing you from engaging in any commercial activities.
Compliance with the FMCSA’s insurance requirements is essential to protect your business and the public. The FMCSA’s commitment to safety and financial responsibility underscores the importance of having adequate insurance coverage for your commercial fleet. Failure to meet these standards can have severe consequences, including legal ramifications and the suspension of your ability to conduct commercial operations. By prioritizing insurance compliance, you ensure the smooth functioning of your business while upholding the safety standards set by regulatory authorities.
3. The Trucking Business is a Big Deal
As per the American Trucking Association, an impressive 72% of the nation’s total freight, measured by weight, is transported by commercial trucks annually. Additionally, Statista’s data reveals a significant surge of approximately 81% in the number of registered trucks within the country over the past decade. With such a substantial reliance on cargo transportation for the nation’s economy, safeguarding your fleet, cargo, and drivers becomes an utmost responsibility as a trucking business owner.
According to fleet management software company, Keep Trucking, the initial cost of launching a new trucking company with just one truck can amount to a staggering $175,000. When considering expenses such as hiring drivers, maintenance fees, fleet expansion, and miscellaneous costs, the total investment can reach hundreds of thousands of dollars. The consequences of facing a legal battle can be disastrous, jeopardizing your aspirations of becoming a prominent fleet owner-operator in the United States and, in extreme cases, leading to the demise of your business.
To ensure the longevity of your trucking dreams, having comprehensive commercial truck insurance is an imperative decision. This insurance coverage acts as a protective shield, preserving your ambitions and mitigating the financial repercussions of unforeseen events. By securing the right insurance policy, you fortify your trucking enterprise, allowing it to thrive and contribute significantly to the nation’s ever-evolving economy.
What Does Commercial Truck Insurance Cover?
Commercial truck insurance covers these specific safety needs of the truck businesses:
General Liability Insurance for Commercial Truck Businesses
Comprehensive general liability insurance offers vital coverage for claims arising from regular business activities, encompassing incidents like property damage, medical expenses, and injuries, especially in the event of an accident involving one of your trucks. Furthermore, this type of insurance not only covers the costs of legal defense but also does so regardless of fault, ensuring a robust layer of protection for your business.
Workers Compensation Insurance
The vast majority of states require workers’ compensation insurance, a critical safeguard that provides essential coverage for your employees. This insurance ensures that your workers receive compensation for lost income, medical expenses, rehabilitation costs, and more in the unfortunate event of an injury or accident. As each driver is responsible for transporting significant shipments, prioritizing their well-being is not only a moral imperative but also a sound business decision that fosters a safe and thriving work environment.
Commercial Umbrella Insurance for a Commercial Truck
Embracing commercial umbrella insurance is a prudent measure that comes to your rescue when your existing insurance policies fall short of covering substantial losses. Picture this scenario: one of your trucks collides with an office building. While your workers’ compensation policy caters to your driver’s injuries, your commercial liability coverage proves inadequate to handle the extensive claim for property damage lodged against you. In such critical moments, umbrella insurance plays a crucial role by stepping in to provide additional coverage, bridging the financial gap, and shielding your business from potentially devastating consequences.
What Is Not Covered by Commercial Truck Insurance?
Commercial truck insurance is exclusively designed to safeguard commercial trucks, and it does not extend coverage to protect the personal belongings of the owner or operator. Here are some common exclusions you should be aware of:
Intentional Damage
Truck insurance explicitly excludes coverage for any intentional property damage or bodily injury inflicted on oneself or third parties. For instance, consider a scenario where you are transporting cargo from California to Ohio for a client who delays payment upon arrival. In a moment of frustration, you intentionally destroy their cargo. In such cases, attempting to file a claim would lead to denial, as intentional acts causing damage are not within the scope of coverage provided by truck insurance.
Racing
Engaging in highway racing is a recipe for disaster. Should you find yourself colliding with an oncoming vehicle, your insurance company will likely refuse to cover the resulting damage.
Certain Natural Disasters
Without the inclusion of specialized coverage for floods and earthquakes, your standard commercial truck insurance will not provide any protection for damage sustained by your fleet or cargo in such incidents.