Trucking Insurance Requirements
by Apex Capital | April 19, 2016
A Guide to Your First Year in Trucking
Weâre posting a series of short videos to show you what you can expect in the first year after you start your own trucking company.
Some of theÂ most common questions we hear areÂ about insurance requirements for new trucking companies. When do you need to get insurance? What types of insurance are required for commercial trucking companies? This week, we’re going to try to answer some of those questions and point you in the right direction to get started.
Read the Transcript
This video series, What to Expect as a New Entrant, A Guide to Running Your Trucking Company in the First Year has been developed by Apex Capital to help you understand the policies and procedures that you must have in place in order to pass your safety audit and get permanent operating authority.
Today we are talking to Reghan Orman about insurance. Reghan is Associate General Counsel at Apex Capital and she also leads the Apex Startup Program. A program that’s designed to help those interested in starting a trucking company get their operating authority.
When do I need to get insurance for my trucking company?
Before any trucking company goes into business, they need to make sure they have Motor Carrier Insurance on file. So, before you begin your operations, you need to be working with an insurance company, to get proof of that to the Federal Motor Carrier Safety Administration because the FMCSA isn’t even going to activate your DOT number until they get proof of that insurance on file.
How do I choose the right insurance plan?
The government requires every motor carrier to have at least $750,000 in Public Liability Insurance. That covers bodily injury, property damage, as well as environmental restoration. Now, depending on the type of commodity that you plan to haul, mainly hazardous materials, that $750,000 minimum is going to increase to $1 million or $5 million. I will note that the government doesn’t require motor carriers to have cargo insurance on file, but it’s highly recommended as some brokers, shippers and other third parties require their business partners to have cargo insurance on file.
How does the FMCSA know if I have insurance or not?
The FMCSA isn’t even going to activate a motor carrier’s number until they have insurance on file and your business customers aren’t going to work with you unless you have active authority. Now, the proof of insurance has to come directly from the insurance company to the FMCSA, it can’t pass anybody else’s hands. But motor carrier insurance companies are really familiar with this process and they know what forms to send.
Now also, if your coverage lapses, the FMCSA is going to suspend your operating authority until they get current coverage on file.
See the Rest of our Series:
A Free Guide to Running Your Trucking Company During the First Year
If you want to start your own trucking company, give us a call at 844-827-4524 to learn more about how our Startup Program can help make the process fast and easy.