Based on weight, trucks move roughly 72.5% of the nation’s freight, much of this locally. These local hauls expose the driver to diverse driving scenarios and a greater array of accident possibilities.

Drivers need to navigate small roads on a regular basis and deal with intersections, traffic coming from multiple directions, cyclists, pedestrians and traffic mitigation measures, such as roundabouts and lights. They’re also required to back into tight loading docks and manage the loading and unloading of freight.

For these reasons, many local trucking companies won’t hire anyone without at least a year of prior experience driving with a commercial driving license (CDL). Local trucking insurance also demands specialized expertise.

Insurance Minimums

Local freight trucking companies are legally required to carry trucking insurance. “Full coverage” entails a combination of primary liability and physical damage insurance.

  • Primary liability coverage provides financial protection if the driver damages someone else’s property or causes bodily injury while operating the truck for business. Every state has different required minimums, delineated by the amount that must be available for payment per person and the total amount paid per accident. As long as you meet the minimums, you are compliant. However, the minimums might not be sufficient to provide the protection your assets require, so be sure to discuss and decide on an appropriate amount for your own situation with your insurance professional.
  • Physical damage – which falls under both comprehensive and collision insurance – is for your own vehicle. “Collision” covers damage to your truck if you hit something or it overturns. “Comprehensive” covers nearly all other damage, such as fire, theft and vandalism, unless it is expressly excluded.

An additional necessity is motor truck cargo insurance, which covers the value of the goods you are hauling and provides restitution if that cargo is damaged, stolen or lost. It also covers the costs of debris removal or any required freight charges that may result from an accident. Your premium will be based on the types of cargo you haul and may exclude prescription drugs, tobacco and alcohol.

Special considerations

As mentioned above, primary liability provides protection when the truck is being driven for business. However, local truckers frequently face certain scenarios that require additional consideration, and they potentially need additional insurance.

  • Non-trucking liability (NTL) – If you are an owner-operator, working either independently or under permanent contract with a motor carrier, you are covered under your own or the motor carrier’s primary liability policy. However, if your truck is ever driven for personal use, this primary liability would not apply, so you would need to purchase NTL for these instances.
  • Bobtail insurance – Although less common than with OTR drivers, some local haulers still operate with a cab and trailer. Bobtail insurance covers those situations when you are driving just the cab without a trailer attached. This additional coverage is typically needed only for drivers under a lease agreement. For owner-operators, bobtail is usually included in your primary liability coverage. However, it’s always wise to confirm this, as policies can differ.
  • Trailer interchange insurance – If you do not own the trailers you are using but are merely transporting someone else’s trailer from one location to another, you’ll need trailer interchange insurance, which is essentially physical damage insurance for another owner’s trailer while in your possession.
  • Commercial fleet insurance – If you own and operate more than one truck, fleet insurance is usually a more cost-effective option than purchasing insurance for each individual vehicle.
  • Umbrella insurance – Recognizing that some lawsuits can result in expenses well beyond your primary liability limits, umbrella insurance provides a cost-effective way to protect against catastrophic loss. Umbrella coverage will not pay for losses to your own property or possessions but will protect you if you are found at fault for someone else’s injury, death or property damage; it picks up where your underlying liability policy ends.
  • Refrigeration breakdown – If your truck or fleet includes heating and refrigeration units, this insurance will cover the liability costs associated with cargo loss due to equipment failure.
  • Permanently attached equipment – Some property damage policies exclude specific types of permanently attached equipment, such as electronic equipment or custom accessories like murals, decals and running boards. If these items represent a significant investment, you can purchase a “permanently attached equipment” policy to ensure reimbursement if they are damaged.
  • Specialized coverage – Specialized policies address the unique needs of certain types of hauling. This includes insurance for sand and gravel hauling, asphalt hauling (either hot or liquid), logging trucks, tankers, steel hauling and refrigerated trucks.
  • Business owner insurance – If you are not only a trucker but also a business owner with a physical location and employees, your insurance professional can help with the additional insurance you require, including a business owners policy, workers’ compensation or other common policies, such as data breach insurance.

There are many riders, policies and exceptions with trucking insurance; much depends on whether you own or lease the truck, cab or trailer, whether you are an independent owner-operator or drive under permanent contract with an individual company, and what you regularly haul. Connect with us and we can review your specific driving operations to make sure you have any policy additions or adjustments needed for many miles of safe hauling.

Industry Insights




Local Freight Trucking Has Specific Insurance Needs