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Owner Operator Insurance

Being an owner-operator in the trucking industry comes with its fair share of risks and responsibilities. As an owner-operator, you are responsible for managing all aspects of your trucking business, including maintenance, fuel, and insurance. One of the critical responsibilities of being an owner-operator is purchasing the right insurance coverage to protect your business from unforeseen risks and exposures. In this article, we will discuss owner-operator insurance, who needs it, the types of insurance coverage needed, the cost of insurance, and the bottom line.

Who Needs Owner Operator Insurance?

Owner-operator insurance is essential for truck drivers who own and operate their own trucks. Typically, owner-operators work as independent contractors, which means that they are responsible for purchasing their own insurance coverage. This type of insurance coverage is especially important for those who transport hazardous materials, as they face higher risks and exposures.

Types of Insurance Needed by Owner Operators

Owner-operators need several types of insurance coverage to protect themselves and their businesses. These include:

Primary Liability Insurance – This is a mandatory insurance coverage required by law for all commercial truck drivers. Primary liability insurance covers damages and injuries caused to others in an accident. It is usually the most expensive insurance coverage for owner-operators.

Physical Damage Insurance – This insurance coverage covers damages to your truck and equipment in case of an accident, theft, or natural disasters.

Non-Trucking Liability Insurance – This insurance coverage provides liability coverage for accidents that occur when you are not under dispatch.

Cargo Insurance – This insurance coverage protects the goods you are transporting in case of theft, damage, or loss.

Occupational Accident Insurance – This insurance coverage provides coverage for owner-operators in case of an accident or injury while working. It covers medical expenses, lost wages, and disability benefits.

How Much Does Owner Operator Insurance Cost?

The cost of owner-operator insurance varies depending on several factors, including the type of coverage, the value of your truck and equipment, your driving record, the type of cargo you transport, and the state you operate in. On average, owner-operator insurance costs between $8,000 to $12,000 per year. However, the cost can be higher or lower depending on the above factors.

Owner Operator Risks and Exposures

As an owner-operator, you face several risks and exposures that could potentially harm your business. These risks include accidents, theft, cargo damage, and injuries to yourself or others. For example, if you transport hazardous materials, you face a higher risk of accidents and spills, which could lead to environmental damage and legal liabilities. In addition, if you transport high-value cargo, you face a higher risk of theft and loss, which could result in significant financial losses.

Commercial Insurance and Business Industry Classification 

  • SIC CODES: 4212 Local Trucking without Storage, 4213 Trucking, Except Local, 4214 Local Trucking with Storage
  • ISO General Liability Codes: 99793
  • NAICS CODES: 484110 General Freight Transit, Local, 484121 General Freight Transit, Long-Distance – Truckload, 484122 General Freight Transit, Long-Distance-Less than Truckload, 484220 Specialized Freight (except Used Goods) Transit, Local, 484230 Specialized Freight (except Used Goods) Transit, Long-Distance
  • Suggested Workers Compensation Codes: 7228, 7229, 7230, 7231, 7232.

Owner Operator Insurance – The Bottom Line

As an owner-operator, you have a lot at stake. Purchasing the right insurance coverage can help protect your business from unforeseen risks and exposures. While insurance can be expensive, it is essential to ensure that you have adequate coverage to protect your investment and livelihood. 

When shopping for insurance coverage, it is essential to work with a reputable insurance provider who understands your unique needs and can help you find the right coverage at a reasonable price. Ultimately, owner-operator insurance is an investment in your business’s future, and it is essential to make the right decision when choosing insurance coverage.

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