Complying with insurance regulations is essential for any serious trucking firm. Without commercial trucking insurance, you cannot operate legally, and you are also unprotected against potential liabilities.
According to https://simplexgroup.net/insurance-coverage/, there are various types of commercial trucking insurance that you should know about. Some of them are obligatory, while others are optional and can ensure the protection of your vehicles, drivers, cargo, and overall business. Let’s break down insurance regulation compliance for trucking companies. Here is everything you need to know if you want to start a trucking company.
Understanding Federal and State Requirements
If you own or plan to start a trucking company in the U.S., then you should familiarize yourself with the insurance requirements set by the federal and state authorities. The Federal Motor Carrier Safety Administration (FMCSA) is the entity that sets the insurance requirements for interstate trucking operations. This also includes liability and coverage limits.
The FMCSA states that you need at least minimum insurance to operate legally. This is because trucks are heavy vehicles capable of causing extensive damage to other traffic participants. Apart from this, the goods that you carry are also more likely to be targeted for theft. The FMCSA won’t grant you operating authority without proof of cargo insurance and liability.
The exact minimum coverage might differ depending on the type of freighter you are operating and what it carries. For example, hazardous materials are harder to transport and have greater risks. Because of this, they are generally subjected to stricter rules and higher levels of insurance.
If you plan to carry products from state to state, you will also need a USDOT number, especially if your truck weighs over 16,000 GVW or transports hazardous materials. Generally, the minimum required limit of commercial coverage stands as follows:
- Non-hazardous materials moved in vehicles under 10,001 lbs require a $300,000 minimum coverage
- Non-hazardous materials moved in vehicles over 10,0001 lbs require a $750,000 minimum coverage
- If you carry oil, you will need at least one million dollars in coverage
- If you transport hazardous materials, you need at least five million dollars in coverage
Obtaining Adequate Liability Insurance
The primary liability insurance is the fundamental insurance requirement for trucking companies to operate legally. This type of insurance covers bodily injury and property damage caused to others by your truck driver’s negligence.
To make sure that your liability insurance coverage meets or exceeds the minimum limits mandated by federal and state authorities, visit the FMCSA official website or do research regarding the minimum insurance coverage limits applied to the states in which you wish to operate.
You should also consider other types of insurance coverage to protect your company, drivers, vehicles, cargo, and other traffic participants. For example, physical coverage can help you protect the vehicles you own or lease against damage or loss that result from collisions, vandalism, theft, fire, or other perils.
If you want your vehicles to be operated for non-business or personal use, then non-trucking liability insurance (NTL) will cover you against damages when a truck isn’t under dispatch or carries cargo for a client.
Additionally, if you have independent contractors or owner-operators working for you, then occupational accident insurance will provide for medical expenses, accidental death, disability, or dismemberment incidents resulting from work-related accidents. When you obtain adequate liability insurance based on the particularities of your trucking company, you actively ensure its protection and success in the long run.
Secure Cargo Insurance
To comply with insurance regulations, you also have to consider cargo insurance. Whether your trucking company transports goods or cargo, this type of insurance will protect your contents against theft, damage, or cargo loss while in transit.
It’s important to check that your cargo insurance aligns with industry standards and specific cargo requirements, such as hazardous materials or temperature-controlled goods. Having insurance isn’t just a good way to protect your cargo, drivers, and vehicles. It also instills trust in your employees, customers, and business partners.
Check Insurance Coverage With FMCSA
The best way to ensure that you comply with insurance regulations set by the FMCSA is to provide proof of insurance coverage to them directly and settle any issues. You must ensure that your insurance provider submits the required proof of insurance, also known as Form MCS-90, directly to FMCSA.
Once the verification process confirms that your insurance coverage is in effect and meets the minimum requirements, you can start your transportation operations.
Review Insurance Policies Regularly and Stay Informed
Among the most crucial aspects of our society today as a business owner is to always remain informed and stay up-to-date with the latest insurance regulations so your trucking business is unhindered by compliance issues.
Regularly review your insurance policies as regulations change, and you might be at odds with the latest changes. To remain compliant, actively communicate with your insurance agent or broker to assess any necessary adjustments or additions to your coverage in a timely manner.
To check out insurance regulations, you can also visit FMCSA and the state Department of Transportation websites often. You can also attend industry conferences if it is to your liking.
Work With a Good Insurance Agent or Broker
Among the best ways to comply with insurance regulations for trucking companies is to work with an experienced insurance agent or broker. When you partner up with an insurance provider, they can guide you through the complexities of insurance regulations and even help you identify appropriate coverage options and ensure compliance with the specific requirements for your operations.
When you comply with insurance regulations, you don’t actively protect your business, employees, drivers, and vehicles. You also adhere to the requirements established in the transportation industry necessary for the protection of the public while also ensuring that you can mitigate potential financial risks and liabilities that could otherwise cripple your business. You also showcase the seriousness of your organization, which can boost partnerships and dealings.