This post was last updated on July 20th, 2019
Trucking is a risky business. Owner-operators average $184,900 per year, doubling the average OTR trucker salary. While the higher salary is nice, the owner-operator has to worry about expenses and risks that a non-owner operator can ignore.
And the one decision that’s the biggest protectant is choosing commercial truck insurance.
Insurance offers owner operator trucking help to ensure that the driver is able to cover their expenses if:
- Occupational accidents occur
- Accidents occur under primary or general liability
- Physical damage occurs
There’s an option for every situation, and the right option for your business. But before even deciding what insurance is best for your business, let’s answer a simple question: is it worth it?
Owner operators are masters of their own fate, and this means that they make their own decisions. An owner-operator owns and operates their own truck, so there are considerable expenses involved.
As an owner-operator, the expenses that you’ll need to consider include:
- Salaries to employees (where applicable)
- Truck repairs and maintenance
- Insurance premiums (cargo, liability, collision)
- Permit costs
- Fuel costs
- Food and drink
- Costs for finding loads
Some estimates suggest that for every $20 in revenue, an owner operator will earn 5% profits. But Indeed.com states that the average salary for an owner operator in the United States is $184,913 per year – a lot higher than the average OTR salary.
That’s a very respectable salary that surpasses that of some doctors and legal professionals.
But as an owner, there are also increased responsibilities, such as:
- Marketing and finding loads
- Obtaining the proper insurance
- Maintaining and repairing rigs
There are slow times and a substantial amount of time, effort and money that goes into finding loads – especially in the initial stages.
Being an owner-operator isn’t for everyone, but if you are business-minded and have a passion for running your own rig, you’ll find that being an owner-operator can be a fruitful, respectable career.
Your biggest risk is insurance.
Trucking Business Risk
You’re in command of a large rig, or several rigs. When you’re driving on the open road, anything can happen. A slight lapse in judgment or a distracted driver can cost you weeks of business.
Cargo that you’re responsible for transporting may also be damaged or destroyed.
These are the risks that a business faces. The proper insurance will protect against these risks to ensure that you’re able to get your business “rolling” again without fear of liability putting your business under crushing debt.
The right insurance policy, dedication and passion make life as an owner-operator worth every second.
How to Choose the Right Commercial Truck Insurance Policy
You need insurance – there’s no way around it. When you choose OOIDA to get your insurance, you’re choosing a proven entity that knows how the industry works. The right policy is hard to choose, and an agent will work with you to determine which policy is ideal.
Your driving habits, region and record may have an impact on your policy.
And choosing the right policy requires knowing what’s available to you to protect yourself, your workers and your business.
What Owner-Operator Services Inc. Offers
Owner-operator Services Inc., a subsidiary of OOIDA, offers several different insurance options and add-ons that can help you protect your trucking operation from risks. Insurance is all about risk management, and the options offered include:
- Primary Liability: A must-have insurance, primary liability protects you against bodily and property damage to another party. Legal obligations for liability maximums is $750,000 based on the FMCSA, with brokers and shippers being required to carry $1 million in primary liability.
- Commercial General Liability: When someone is injured on your business’s premises, commercial general liability will kick in. This insurance protects against bodily injuries and property damage for injuries or accidents that arise from your products, premises or operations.
- Motor Truck Cargo: Goods damaged while in your care will be protected under motor truck cargo insurance or cargo insurance, depending on the name given by the provider. This insurance will include debris removal and may even include towing and cleanup.
- Passenger-Accident Coverage: If a passenger is injured inside of a rig, passenger-accident coverage will cover accidental death and dismemberment. Medical expense coverage will also be provided with no deductibles (under OOIDA).
- Physical Damage: Protection for your automobile. The insured vehicle will be protected from damages that occur due to vandalism, collision, fire or theft. There may be advantages for insuring both a rig and trailer with the same company.
These are the base coverage options that are offered to owner-operators that need to protect their operations from potential liabilities.
OOIDA offers a lot of additional coverage options that can help further protect your trucking business, including:
- Downtime Coverage: This is coverage that protects your business when repairs or physical damage claims are being fulfilled. OOIDA’s coverage provides $300/day with up to $18,000 maximum coverage from downtime.
- Breakdown Coverage: Potential breakdowns cost your business money. This cover offers pay for both towing and labor when breakdowns occur.
- Personal Property: Insurance that protects the driver from personal property damage, such as damage to radios, laptops or other personal property.
- Limited Depreciation Coverage: A protection against the depreciation of your truck’s value, which is very high for new models during the first few years of ownership.
- Gap Coverage: If you have a loan on your vehicle, gap coverage will cover the “gap” between the amount owed on your truck loan and the value given by the insurance company.
- Supplemental Towing and Clean-Up: A covered loss option that provides you with help for debris removal, cleaning of the accident scene and even towing of your vehicle.
- Rental Reimbursement: While your vehicle is inoperable, OOIDA will cover the cost of a rental vehicle. There are strict daily and maximum limits, but rental reimbursement can help absorb a lot of the rental costs owner operators potentially face.
- Trailer Interchange: Coverage for any non-owned trailers when the shipper or carrier holds you responsible for any damages that occur during transport.
If you’re on a lease, OOIDA offers an entirely different set of coverage options, including:
- Non-trucking Liability: Liability coverage for when the truck is operated for personal reasons.
- Bobtail Liability: Coverage for a truck that’s operating without a trailer attached.
- Unladen Liability: Coverage for when the truck is being operated with an empty trailer attached or no trailer is attached.
Passenger accident coverage and physical damage are both offered, too. These are just the base options available for owner operators of a rig that’s currently being leased. You’ll find a lot of coverage options that may include:
- Downtime coverage
- Breakdown coverage
- Personal property
- Limited depreciation coverage
- Gap coverage
- Supplemental towing and clean-up
- Rental reimbursement
- Trailer interchange
As you can see, there are a lot of coverage options – both base and optional coverage – that can help lower your risks as an owner. Proper coverage and limits allow you to secure a policy that will work best for your business.
You’ll want to talk to an insurance agent to discuss the exact policy that will work best for your operations.
Which coverage is best?
If you’re an owner-operator, you should obtain primary coverage first. Primary coverage will provide the required coverage on the state or federal level. Optional coverage can then be discussed and added to your policy as needed.