Insuring Your Trucking Business and Staying on the Road
One of the largest items eating away at your profit margins will be trucking insurance. We all love paperwork (joke), but how you insure yourself and the business is going to have a huge impact on your profitability the survival of your business in future. Accidents do happen, and sooner or later you will encounter an incident, whether it is your fault or not, which is going to need you to claim and be protected.
Commercial semi tractor trailer insurance must be set up properly. You need to have the professional advice of a broker who really knows what they are doing and understands how you operate your business.
Know What You Need
The first thing to do is to assess how much insurance you need and what type of risk you are facing.
You may need to consult a company or two to be able to work out how much coverage you are going to need, but at this stage don't commit with any company. You are simply working out what type of coverage you need and how much monetary cover you will need to keep yourself in business.
Ask yourself if you need to cover just yourself or drivers working for you – or both? If people are working for you, what about workers' compensation? Do you require cover for full or partial liability? If you opt for partial liability, where or how will you be able to meet any shortfall in the event of a successful claim against you? Are you going to insure yourself for fire, theft, collision or CDC acts?
There are also other factors to consider because you are typically contracting with customers as well, so you may have liability to them in the event you cannot meet contractual obligations, or lose or damage their cargoes. You need to understand and consider bobtail liability; cargo insurance cover; fuel bonds; coverage for your equipment including cab and semi trailers.
Compare Multiple Quotes from Different Companies
The next step is to get different quotes from different companies. Make sure you use the same coverage limits to get the quotes so you can compare like with like. Also get quotes with differing amounts of coverage so you can focus in on dovetailing your coverage to your budget – for many truckers, insuring for everything is not financially possible, so assess what coverage you really have to put in place and then consider how additional risks can be covered with your budget.
You can do a lot of this online, so let the World Wide Web and email take the strain instead of phoning everyone.
When you have the quotes in, take the time to look through them and understand exactly what they are covering you and how much is being charged in premiums. You need to understand that you must compare quotes which are providing identical coverage – some companies will not cover certain risks, such as someone stealing your fuel, while others will offer superior medical compensation benefits. Look at the cover being provided and then compare to see who is giving you the best deal on premiums – the time to discover you are not covered for something is not when an incident has occurred and you have lost your rig while being sued for millions of dollars after an accident.
Insurance Company Research
When you have selected two or three companies to place your business with, you have one last thing to do. Research the companies shortlisted – especially look at their "claims payout ratios" or something similar. This is a ratio of how much they pay out in claims compared to how much they collect in premiums – if it is high, it means they pay out well when there is a claim, a low ratio means they deny a lot of claims. Also look at the financial stability of the company and look at any ratings by companies such as JD Power.
Once you have your cover in place, you need to review it on a regular basis – say once a year or certainly whenever you have a major change, such as adding a semi tractor rig to your fleet or hire new drivers. Insurers change frequently in their rates and products offered, as does the trucking business, so make sure you go through this repeat cycle on a regular basis to ensure you get the best deal for your cover and the coverage you really need.