The New Year is at hand and 2022 is set to be an important year in many industries, including transportation. With a growing demand and limited supply of companies that haul goods for others, many entrepreneurs and experienced drivers are taking the opportunity to meet those demands by opening up their own transportation company. With the new found opportunity, insurance will play a crucial role in becoming a safe, compliant, and credible Transportation Company. There are four main coverages involved in insuring a transportation service: Automobile Liability, Automobile Physical Damage, Motor Truck Cargo and Commercial General Liability.
Automobile Liability –
Automobile Liability is a mandatory coverage for all motor vehicles. This coverage is protection for Bodily Injury, Property Damage, and Direct Compensation for Property Damage (Introduced in 2022). It is important to know the commodities hauled including information on any Dangerous Goods, the radius of operations, trailer configurations, and the experience of the professional driver in that field. At first, newly incorporated companies with no prior insurance history will likely need to seek coverage through alternative markets such as Facility in order to establish Claims Experience.
Automobile Physical Damage –
This is an optional coverage that covers any damage caused to your owned trucks & trailers where the value of the damages exceed your deductible. If you are renting or pulling someone else’s trailer, you can included “Non-Owned Trailer Coverage” to ensure you are protecting it during your care, custody and control. If your Trucks/Trailers are leased/financed, the company will require you to carry this coverage in order to protect their interest. It is important to note that Automobile Physical Damage is broken into four separate coverage (All Perils, Collision, Comprehensive, and Specified Perils). Your Automobile Physical Damage will be offered by the Automobile Liability insurer, but in some cases you may find it more beneficial to place this coverage with an alternate insurer.
Motor Truck Cargo –
This coverage offer protection to your customer’s goods while they are in your care, custody and control in transit. In the event of loss or damage to the cargo, this coverage will cover the cost of the loss incurred. It is important to know the different types of commodities hauled, the average & maximum value of the commodities along with clarification of any cargo sensitivities (temperature, TDG etc.) This information will help determine the appropriate rate & coverage for your operations.
Commercial General Liability –
Commercial General Liability often referred to as the CGL is an important piece of the insurance that transportation companies require. The nature of the work performed in the Transportation industry puts trucking companies at a high risk for claims and the CGL will protect you from potential third party incidents while not in motion. An example of this would be unloading or loading on a third party site and the driver causes an injury or damage to the third party employee or their equipment. Think of the CGL as protection against Third Party Property damage and third party bodily injury. Every business should have this coverage as a bare minimum to their insurance.
The above mentioned coverages are merely the tip of the iceberg as each operation has their own set of risks and exposure’s and it is important to have a conversation with your broker as well as customers to develop an insurance program that fits their operations. Limits, deductibles, endorsements and warranties are all items that should be reviewed and confirmed to ensure you understand how you will be protected and confirm your compliance with the NSC, stakeholders and the public.
For those looking for more information on developing an Insurance Program for a new or existing Transportation Company, please reach out at firstname.lastname@example.org
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