What Insurance Do I Need to Start a Hot Shot Trucking Business?

What Insurance Do I Need to Start a Hot Shot Trucking Business?

You've got the truck. You've got the trailer. Maybe you've even picked out a name for your business. Now comes the part that trips up a lot of new hot shot truckers: figuring out exactly what insurance you need.

The good news is it's simpler than it looks once you break it into three buckets: what the law requires, what brokers require, and what protects you and your business.

If you're still getting familiar with the industry, check out What Is Hot Shot Trucking? first.

Bucket 1: What the Law Requires

Primary auto liability

This is the one you can't skip. Primary liability pays for injuries and property damage you cause to other people in an accident. If your truck and trailer are rated at 10,001 pounds or more and you haul for hire across state lines, the federal minimum for general freight is $750,000.

Your insurance company files proof of this coverage with the FMCSA, and your MC authority won't go active until that filing is in place. In other words, no liability policy means no loads.

Bucket 2: What Brokers and Shippers Require

Meeting the legal minimum gets your authority active. Meeting broker requirements gets you paid. Most brokers and shippers won't book you unless you carry:

$1,000,000 in primary liability. Even though the law only requires $750,000, $1,000,000 has become the industry standard. Carrying less can shut you out of a lot of good freight.

Motor truck cargo insurance. This protects the load you're hauling if it's damaged or lost due to an accident, fire, theft, or other covered event. Most brokers want to see at least $100,000, and some higher value loads call for more.

Bucket 3: What Protects You and Your Business

These coverages aren't always required, but they're what keep one bad day from turning into the end of your business.

Physical damage. Covers repairs or replacement of your own truck and trailer after an accident, theft, fire, vandalism, or weather. Liability won't pay a dime toward your own rig. If your truck or trailer is financed, your lender will almost certainly require this coverage.

General liability. Covers injuries or damage that happen off the road, like a customer tripping over a strap at a job site or damage you cause while loading. Some shippers ask for it.

Non trucking liability. If you're leased onto a carrier, their policy usually covers you while you're under dispatch. Non trucking liability fills the gap when you're driving your truck for personal use. If you run under your own authority, your primary liability typically handles this instead.

Occupational accident insurance. As an owner operator, you may not be covered by workers' compensation. Occupational accident coverage helps pay medical bills and lost income if you're hurt on the job.

Trailer interchange. If you ever pull a trailer you don't own under a trailer interchange agreement, this covers damage to that trailer while it's in your care.

What About My Personal Auto Policy?

A lot of new drivers assume their personal policy will work until they get established. Unfortunately, personal auto policies typically exclude hauling freight for pay. We break down why that's such a costly mistake in [LINK: Can I Use My Personal Auto Policy for Hot Shot Trucking?]

How Much Will All of This Cost?

That depends on your experience, your record, what you haul, and which coverages you choose. We cover the numbers and the biggest price factors in [LINK: How Much Does Hot Shot Trucking Insurance Cost?]

How Hutsenpiller Insurance Can Help

Every hot shot operation is a little different. A driver hauling farm equipment around Middle Tennessee doesn't need the same policy as someone running steel across five states. As an independent agency, Hutsenpiller Insurance can shop multiple insurance companies to build a policy around how you actually run, so you're not paying for coverage you don't need or missing coverage you do.

Getting your authority set up? Call us at 615-773-2886 or visit hutins.com and we'll help you get covered and on the road.