Commercial Truck Insurance: Liability, Programs, Costs & More
June 4, 2020
- Last edition
June 4, 2020
What is Commercial Truck Insurance?
Commercial truck insurance includes a range of commercial auto insurance policies. They are designed to cover the needs of trucking and transportation goods companies. Beyond liability, commercial truck insurance requires additional coverages necessary to protect trucking companies and their employees, including truck drivers.
Shippers hire trucking companies to move products, animals, materials, and other goods from one place to another. Shippers hire trucking companies directly or use a freight broker to manage transportation details from pickup to delivery of the shipment.
Census.gov reports more than 3.5 million people work as truck drivers. As such, truck drivers are one of the largest occupations in the United States. The sheer size makes commercial truck liability insurance and relevant coverages a substantial market.
Commercial Trucking Requirements
The insurance needs of commercial trucking operations are considerable. Review the following commercial truck program insurance coverages as they are the most important when writing commercial truck insurance:
Also known as Truckers General Liability, this coverage insures for bodily injuries or property damage that happen due to business activities that are NOT the cause of operating a truck. It covers accidents that occur in parking lots, rest stops, also while loading or unloading. General liability can also cover losses related to theft and vandalism.
Physical Damage is a group of coverages set to protect trucking vehicles. These include Collision Insurance and choices for full Comprehensive insurance or Fire and Theft with Combined Additional Coverage (CAC) insurance, which is a more limited form of coverage.
Motor Truck Cargo
Motor Truck Cargo is an inland marine form of insurance. In general, this coverage pays for loss of property during transit, either by common carrier or on the insured's vehicles, depending on the form used. It provides insurance on the freight or commodity hauled by a For-hire trucker. Coverages include liability for lost or damaged cargo caused by fire, collision, or the striking of a load. Load strikes happen when there is a collision of the freight with one or more objects that is not a result of an accident to the hauling truck.
Medical Payments Coverage, sometimes called Med Pay, provides payments for injuries suffered by truck drivers, employees, or persons who are riding in the truck with the consent of the insured. Med Pay also provides compensation for accidental death that happen while using the truck. Coverage can include compensation for long term suffering when applicable. Med Pay can and often does overlap with health and other medical insurance coverages.
A reefer, or refrigerated truck, has unique insurance needs because they are carrying perishable goods that require constant chilling. Reefer Breakdown coverage pays for losses when a refrigerated load spoils due to mechanical failure of the commercial vehicle or other such common occurrences.
Additional coverages often bound in insurance policies for trucking companies include Towing, Business Interruption, Underinsured/uninsured Motorist, Rental Reimbursement, Cyber Attack, GAP, Electronics, Non-Trucking Liability (Bobtail), Occupational Accident with contract liability, Individual Major Medical, and Mini-med options, and more.
Hardening Hard Market in Commercial Trucking Insurance
In 2020, hard market conditions are driving costs for commercial truck insurance to new heights. According to Risk&Insurance.com in its There's the Hard Market — Then There's the Trucking Industry article, these new higher rates come on top of premiums per mile that rose 17% between 2013 and 2019. The article points out insureds are now seeking higher deductibles and retention tools to lessen the global costs of patching liability programs together.
As part of the United States Department of Transportation, the Federal Motor Carrier Safety Administration (FMCSA) regulates the trucking industry. The FMCSA's mandate is to reduce crashes, injuries and fatalities involving large trucks and buses.
Among the categories the federal regulations cover are drug and alcohol testing, hours of service, vehicle marking, and maintenance. A truck driver's failure to follow a federal or state safety law is strong evidence of negligence after a truck accident causing personal injuries.
Not all states recognize the doctrine of negligence per se, but the states that do recognize this doctrine may allow an inference of negligence if the truck driver violated a safety statute, the violation proximately caused an accident, and the victim was a member of the class that the statute was designed to protect. An inference of negligence can make it easier for a victim of a truck accident to recover damages. Even when states do not recognize negligence per se, evidence that a truck driver caused an accident by violating federal or state safety regulations is strong evidence that a duty was breached.
Will New Rules Affect Commercial Truck Insurance Programs and Transportation Insurance?
On May 14, 2020, the FMCSA announced new hours of service rules to give semi-truck drivers more flexibility. The long-awaited final rule is updating hours of service rules for commercial motor vehicle drivers that offer the industry more flexibility. It's too soon to tell what effect the new rules will have on trucking insurance. When we have pertinent information on this and other insurance topics of interest for the trucking business, you will find updates posted here on the Program Insurance blog.
Violations of FMCSA regulations are often the centerpiece of litigation seeking redress for property damages and bodily injuries involving freight trucks. The Insurance Task Force (ITF) is part of the American Trucking Association. The ITF is carrying out an aggressive tort reform agenda to attack the underlying cause of high insurance rates: outrageous and unfair verdicts caused by what it sees as a deeply flawed judicial system. Among its successes, is state trucking associations, with funding by the ITF in numerous instances, have now obtained motor carrier anti-indemnification laws in 46 states, which is up from eight just a few years ago.
In addition to safety regulations, numerous federal and state laws impact commercial truck insurance programs. Competent risk management advice and insights from a knowledgeable, experienced broker are necessary to present options and write appropriate coverages for the complex problems in commercial truck risk management.
Best Commercial Truck Insurance Programs
Commercial truck insurance is a large market with a wide array of companies who need the coverage. Their demands are varied and oftentimes complicated. It's essential to work with a broker or market that understands those needs and how best to write coverage to protect them. You will find Dovetail Insurance as one of the top truck insurance programs in the Program Business marketplace. It as an excellent choice to help you with your trucking insurance needs.