As the owner of a commercial trucking business, you need insurance coverage that can be scaled with your growing operational needs. While primary coverage needs are required by law, many businesses have specialized needs based on their vehicles and cargo that need to be covered by more comprehensive liability insurance.
In this guide, we review the essential types of commercial trucking insurance for Illinois business owners. Choosing a policy with sufficient coverage requires understanding the business’s needs and risk factors and how these impact the insurer’s policies. Consult with an insurance agency experienced in the trucking industry to find coverage that meets your business’s operational needs as it grows.
Liability Insurance
Liability insurance protects your vehicles and drivers from damages resulting from accidents involving your vehicles. The amount of coverage your business needs depends on numerous factors, including the weight of the vehicles and the type of cargo you transport.
For example, trucks of 10,000 pounds or less are insured with lower liability limits than those that are heavier. Your trucks will need additional coverage if they carry valuable, fragile, or hazardous cargo. The Federal Motor Carrier Safety Administration (FMCSA) lists these guidelines for liability limits in the American trucking industry:
- Household freight requires a liability limit of at least $300,000
- Trucks that transport freight over state lines require $750,000-$1,000,000
- Oil and related substances require $1,000,000
- General freight (non-hazardous) requires $750,000 or more
- Hazardous materials require $5 million or more
Liability requirements increase when the trucks carry hazardous materials because accidents involving these materials are more dangerous and more expensive to clean up. Additionally, trucks that carry passengers also have different liability requirements, up to $5 million, due to the possibility of bodily injury liability.
Your business’s liability needs will depend on your business’s operations, including your goals for scalability. If passengers, other motorists, or bystanders receive hospital bills due to an accident involving one of your vehicles, liability coverage is needed to pay for the damages.
Cargo Insurance
Cargo insurance protects trucking businesses when their cargo is lost, stolen, or damaged. Depending on your industry, lost or damaged cargo can result in expensive replacement costs and fractured relationships with valuable clients.
By covering their shipments with versatile cargo insurance, trucking businesses can offer their clients financial protection against eventualities that may be out of their control. This demonstrates a commitment to client interests while protecting the business from costly damages.
Physical Damage Insurance
Physical damage insurance comes in two categories: collision insurance for accident-related damages and comprehensive insurance for other damages. This insurance covers your trucking business for the costs of replacing or repairing your vehicles.
In addition to accidents involving your drivers, damage related to vandalism, theft, and environmental disasters should be covered up to the liability limits of your vehicles and their potential cargo. Purchasing the right policy for your business depends on accurately calculating the value of potential damage and buying coverage that meets the needs of your area.
Bobtail Insurance
Bobtail insurance coverage refers to policies purchased for damages related to activities not related to transporting your business’s cargo. For example, when your trucks are returning to base or on their way to their cargo pickup, they may be involved in an accident. Cargo insurance and other types of liability coverage may not cover these events since they occur outside of the business’s normal activities.
With bobtail insurance, your trucks will be covered even when they are empty. This coverage applies to commercial fleet owners but will prove particularly beneficial to independent truck drivers, who may often use their trucks for non-revenue-generating purposes.
Calculate Risk Exposure
To purchase a policy with the right coverage for your commercial trucking business, you should compare your specific risk exposure to each insurer’s liability limits for businesses in your area. Some regions have greater risks of accidents due to more hazardous weather conditions or denser traffic.
Speak with an insurance agency with experience in finding policies for commercial trucking companies in Illinois to accurately calculate the risk exposure in your situation.
Get Comprehensive Coverage with Pro Insurance Group
Liability coverage is a necessary concern for commercial trucking businesses in Illinois. At Pro Insurance Group, our team leverages years of expertise in trucking insurance to customize policies that cover all eventualities for our clients.
Instead of spending valuable administrative resources comparing and shopping for policies with adequate liability coverage, our experienced team can match the policy to your operational needs and goals as you expand your operations.
Contact us and schedule a consultation to learn how our experts can help you create a policy that meets your needs and regularly review your policy to make sure your trucks and drivers remain covered in the event of an accident.