An overview of the US trucking industry reveals the growing number of owner-operators with their own authority that have boosted the commercial trucking industry over the past few decades. To run your truck on your own terms can be challenging, exciting and risky, all at once. The tide in the trucking industry is turning with more and more independent owner-operators working under their own authority joining the community. You require financing, credit and a strategic plan to take the leap to progress from being a company driver to owner-operator and finally one with own authority.

As an independent owner-operator, the major cost to convert to working on your own authority would be the insurance amount required to acquire your own DOT number. The US DOT number is a unique identifier and is required for monitoring information regarding the trucking company’s safety. You can check the requirements for acquiring a US DOT number and ensure compliance. The primary liability insurance that you would be required to pay yourself would be one of the most massive costs you would incur during this process.

It is important to discern right at the beginning how to narrow your risks and what would be the insurance coverages you would require as an independent owner-operator. A truck authority insurance policy has a range of different components.

Liability Insurance

In case of accidents, liability insurance protects you if any injury is caused to people or if there are property damages. The average amount for this goes from $750,000 to $1,000,000. If you are hauling material that might be hazardous, an amount of $5,000,000 is recommended as minimum coverage. It is usually one of the most expensive components of commercial truck insurance.

It is compulsory for all commercial trucks. Driving a commercial truck without primary liability insurance can lead to massive fines and penalties.

Cargo Insurance

Cargo Insurance is a tricky territory because different shippers may have different rules and requirements. The insurance amount largely depends on the goods being hauled. It is important to be aware that the goods you frequently transport should be insured, and you could leave out freight that you do not haul. The selection of the policy is extremely significant in this case because some shippers have preferences about certain cargo policies and may or may not associate with you based on that. The usual limits for cargo insurance are around $100,000.

Physical Damage Insurance

Unexpected damages on the road can dampen your business. This insurance covers such damages that may occur on-road or due to an accident. The costs usually vary between 3-5% of the value of the goods being shipped.

You may need a bucket of other coverages as well to make your own authority insurance comprehensive.

• General Liability: This is the basic insurance that goes with commercial trucking to protect the public against losses and physical injury during an accident.
• Bobtail: It covers the liabilities of the independent owner-operator when the truck is not being used for transporting goods.
• Trailer Interchange: It covers damage that may occur to a non-owned trailer that you are hauling under a trailer interchange agreement.
• Umbrella: It offers protection from unexpected and unintended, circumstantial occurrence, where primary liability coverage may be insufficient.
• Occupational Accident: It includes medical, disability, death and dismemberment coverage in case of accidents.
• Workers’ Compensation: Mandatory insurance for many trucking companies that provides coverage for medical expenses, low wages, rehabilitation costs, death benefits and others.

These are some of the coverages you may want to consider based on your service area, distance covered, your experience and business associates.

Premium

The insurance company you select will evaluate your risk based on various factors, including:

• Area of operation
• Driving record
• Garaging location
• Credit rating
• Criminal record
• Age
• Goods hauled
• Condition of the equipment