With Own Authority
Saberlines Insurance recommends the following coverage, based on federal , state or brokers requirement, for Owner Operator with own Authority, the following is a standard insurance coverage:
- Truck liability limits of $750,000 CSL or higher as needed by federal and state law, a minimum of $750,000 CSL depending on truck gross or combined gross weight -including attached trailer – most brokers, however, require at least $1,000,000 of Truck Auto Liability, with federal and/or state authority, Liability would cost the most in any truck insurance policy, and its the only part that’s legally required, current insurance market prices for $1,000,000 Truck Liability – is between $6,750 to $9,300 a year, some classes require higher liability limits, and would cost more premium, hazmat haulers legally require limits above $1,500,000 in truck auto liability. Truck Auto Liability covers third party damages resulting from trucking related accidents.
- Motor Truck Cargo insurance of $100,000, which is the most common limit for hauling general freight, but we can offer higher limits if needed, this covers damage to Cargo.
- Physical Damage to cover damage to tractor and trailer resulting from theft, vandalism and collision, trailer interchange or non-owned trailer, are also covered under O/O Physical Damage.
- General Liability Insurance coverage and Additional Insured Endorsement can be added if required, like when hauling shipping containers from the port, or running warehouse for storage, this covers third party damages resulting from non-trucking related damages.
- Workers Comp, which covers employees medical bills & lost pay from work related injury or illness, if not possible then Accidental Death & Disease Insurance (AD&D) should be considered to cover the O/O.
Leased Owner Operator
Saberlines Insurance has complete insurance package for O/O under lease, if the driver owns the truck and the trailer and is leased to another trucking company then the leasing trucking company will provide the Truck Liability and Cargo Insurance coverage for the driver, but only while the driver is on duty -on dispatch., O/O under Lease will still need:
- Motor Truck Cargo: cover damage to Cargo, maybe needed if the leasing company not providing.
- Physical Damage: insurance covers Truck and Trailer against theft, collision and Vandalism.
- Bobtail Liability Insurance: this will cover third party damage caused by trucking business related accidents when the truck is not loaded- not hauling a load, coverage is very affordable, and can be added to the physical damage policy.
- Non-Trucking Liability: covers third party damage resulting from non-trucking related accidents, bobtail is needed because the driver will not be covered under the leasing company’s Liability Insurance while he is not on duty.
- Workers Comp or Accidental Death & Disease insurance: reason the leasing company may not provide the driver with workers comp, since the company could still classify the driver as an owner operator, not an employee.
Owner Operator or Company Driver?
Owner operator is an independent business owner who owns his truck and trailer, decides which load to haul, the hours and even the route he wants to take, he keeps most of the money he makes after deducting the business expenses, with this freedom comes more responsibility, longer working hours, problem finding loads and higher overhead cost specially at the beginning.
Owners operators can lease their equipment from other trucking companies, or buy through third party financing, which might affect their independence, some owners operators add more drivers and trucks to operate under their authority, to increase their revenue, but ending up as a small fleet trucking company, and this no longer fits as an owner operator from the insurance perspective, but a group of owners operators pooled together!
Owners operators leased to a trucking company will be working under that company authority, maybe put on the company uniform or display the company logo on the truck, driver like this, is more or less a company driver, since he has no control over the hours, loads or the routes he is taking, but the overhead cost is much lower compared to an independent owner operator, fixed expenses are handled by the leasing company, maybe the driver wages or salary will not increase for ever, but the company driver could still earn more after all expenses deducted, specially around slow seasons.
The classification of company driver or owner operator is being manipulated by all industries, to avoid paying extra employment taxes, providing workers comp or employees benefits, drivers need to get properly insured, not just the limits required by the law, or the leasing company, or the bank financing the truck or the trailer, but consider proper health and life coverage to protect the most important assets of this industry: the drivers!