Many trucking companies in the United States spend more on their truck insurance than they’re supposed to. To handle their expense, these companies either move to cheaper insurance or completely cancel their truck drivers’ insurance policies. In both these cases, their final decision is often incorrect and negatively influences the company’s reputation in the trucking industry. But, what should these companies do to manage drivers’ insurance without burdening their budget?
First off, these companies should evaluate their policy declaration and find why they pay more on their insurance. After assessing their policy, most companies will realize that they’re paying for a coverage that they won’t ever really need.
In this article we discuss how you could be over-insuring your trucking business and the 3 coverages you likely don’t need.
Why Do Owner-Operators Over-Insure Their Trucking Business?
When a fleet owner-operator asks an insurance agent for “trucking insurance”, the agent offers them a default commercial auto insurance policy. These policies include a wide range of benefits, but most of them are unnecessary for the business. Therefore, when looking for trucking insurance, you must check whether you’ll need these benefits in the future or not.
Three Types of Insurance You May Not Need for Your Trucking Business
The first thing to check before purchasing an insurance policy is the nature of your business. Many insurance agents try to sell ordinary business packages. So, when you go shopping, you need to keep in mind that you have a trucking business. Some common types of insurance that don’t suit your trucking business are:
1. Commercial General Liability
If you operate your business from home, then you are an independent owner-operator. This, also means that your physical business isn’t open to customers and the public. In this condition, commercial general liability is the wrong insurance for your business. Commercial general liability covers the liability to people who visit your place of business. These can be maintenance facilities or dispatcher offices. However, since you work alone at home, you don’t need this coverage.
2. Hired Auto Coverage
Small trucking companies such as independent owner-operators shouldn’t choose hired auto insurance coverage. This insurance covers accidents with vehicles that your employees own, but use for work purposes. Since you’re a small and independent fleet, this coverage is useless for your business.
3. Non-Owned Auto Liability
Non-owned auto liability isn’t necessary for small trucking businesses. It has similar conditions as hired auto; therefore, you won’t use your employee’s vehicle for your business. An independent owner-operator may use their personal vehicle to pick up parts or run other errands for the business. Therefore, it’s likely they already have insurance that will adequately cover any issues that occur while doing this.
Knowing what coverage applies to your trucking business can save you thousands of dollars on your annual insurance premium. It would be best to evaluate your truck insurance options and choose the one that suits your business better.