Tag Archives: trucking insurance

How Can Someone Start a Trucking Business?

Almost everything you buy has been moved by a truck at some point, whether it’s food, gasoline, clothing or other items. The trucking industry can be very lucrative, but it is also a highly competitive industry. It’s smart to research the industry thoroughly before starting your own company to be sure you understand everything involved with starting a trucking business.

Decide If You’ll Subcontract

One of the first decisions you need to make when starting your trucking company is deciding whether you will hire employees or use subcontractors to drive your trucks. They are positives and negatives to each method and trucking companies have succeeded both ways. There are generally less start-up costs involved when you have sub-contractors instead of employees, but you also have less control over the schedule of the drivers and you may have to pay a higher percentage of the money you make to subcontractors than you would pay to company drivers.

Trucking companies who hire drivers to work for them as employees have more control over the drivers and can set the rates that they will pay the drivers. The downside is that the company has to pay for insurance and equipment costs that would normally be paid by subcontractors.

Starting The Business

In some ways trucking companies are started the same way that other businesses are started. The company owner must register the business with all applicable state, federal and local agencies. You must get a business license and all necessary permits before your company can legally operate. It is essential that you get a Federal Department of Transportation Number. This number must be displayed on all of your trucks. You also need to apply for and receive Federal Motor Carrier hauling authority.

Tax Forms and Registrations

There are several tax forms that must be completed periodically for your trucking business to be operating legally. One of these is a heavy use tax form. You also need to obtain International Registration Plan tags as well as International Fuel Tax Agreement decals from your state department of transportation. A BOC-3 filing is required to operate a trucking company legally in the United States. It’s best to visit a local licensing office or your state department of transportation’s website for specific information you need to legally operate a trucking company in your state. It’s best to talk to an accountant who has experience with the trucking industry when you are forming your trucking company. They will be able to offer business advice and help you manage the company’s finances correctly right from the start.

Trucking Insurance

There are very strict insurance requirements that anyone who owns a trucking business must meet. You must have insurance on your vehicles as well as the company itself. Some of the companies you haul freight for may have even stricter requirements than the federal regulations, so make sure your insurance policy meets their requirements before hauling loads for those companies.


If you decide to hire truck drivers and operate your own fleet of commercial vehicles, you need to purchase the vehicles. Most experts in the trucking industry recommend starting with just one or two vehicles and adding to your fleet as time goes on. This gives you the ability to learn the trucking industry without being overwhelmed by the number of drivers and vehicles in your fleet. Think about the type of freight you will be hauling before purchasing trucks and trailers so that you buy the appropriate vehicles. Refrigerated trailers are likely to be more expensive than dry van trailers, but they are necessary if you will be hauling food or other perishables.

What Types of Trucking Insurance are Available to Leased Owner-operators?

Many owner operators who have leased their trucks go through the company they have leased their truck with for their trucking insurance, but they often find that securing their own insurance policies is less expensive in the long run. There are other advantages to securing your own financing. One is that you know exactly what the premiums and coverage amounts are and can make changes if you’d like to. Another advantage is that you won’t have to change insurance companies if you decide to terminate your lease.

There are many types of insurance available to leased owner-operators, including non-trucking liability and physical damage. Some of these insurances are required by law, while others are optional and may be purchased as a package for additional discounts.

Non-trucking liability insurance provides coverage to your company while the truck is on the road for personal service rather than professional service. This trucking insurance only covers the truck when it is not being used to make money.

Other types of liability insurance include bobtail liability and unladen liability. Bobtail liability is designed to provide liability coverage for the truck when it’s being driven with no trailer, whether or not the truck has been dispatched. Unladen liability protects the company from liability when the truck is being driven without a trailer or attached to an unloaded trailer.

Passenger accident insurance provides coverage against accidental death and dismemberment as well as accidental medical expenses for passengers who are guests. There is no deductible and no age requirement for coverage. These policies generally exclude employees and co-drivers who are riding in the passenger seat.

Physical damage insurance covers leased owner-operators from damage or loss to any insured vehicle when the damage is caused by theft, collision, fire or vandalism on a basis of cash value. Coverage often includes downtime coverage as well as glass breakage and chip repair. Most policies have a combined deductible so that you don’t have to pay twice when both the trailer and tractor are damaged during the same incident.

Several optional coverages can be purchased with your physical damage insurance policy if you choose. These policies protect your company from further liability in the event of an accident or loss. One of these coverages is downtime coverage. This insurance provides you with extra protection for times you are not working due to physical damage of your truck or trailer. Waiting periods and daily maximums apply.

Breakdown coverage is a great option for owner-operators who have their trucks leased on with carriers. This insurance helps you pay for unexpected labor and towing when you are stranded on the side of the road due to mechanical failure.

Owner-operators who purchase their trucks new are often hit with significant depreciation charges. Limited depreciation coverage insurance is a great way to eliminate depreciation, but you can only purchase this coverage if you bought your truck new and it is the current model year. Gap coverage is another type of insurance that is especially important if you purchased your truck new. This insurance covers the difference between the amount you owe on your truck loan and the market value of your truck if your truck is deemed to be a total loss in an accident. You can purchase gap coverage to cover both your tractor and your trailer if you own them both.

Trailer interchange insurance may not be necessary if you have leased your truck with a carrier because they typically own the trailers you are pulling. This insurance covers you from liability for damage to any trailer that you don’t own when it is being pulled by your truck. Ask the company you are leased to if trailer interchange coverage is required.