Trucks aren't always on the road just to transport goods from point A to point B. Sometimes they need gas, a wash or maintenance — and on those trips, there's no third-party liability coverage if an accident occurs. It's cases like these that make Non-Trucking Liability insurance a must-have coverage for owners/operators, because it fills a gap in Liability coverage that exists when an owner/operator's truck is driven for non-business purposes.

With help from Senior Transportation Underwriter Dida Taylor at the RPS Lexington branch, let's take a ground-level view on why Non-Trucking Liability insurance is a critical component for an owner/operator's asset protection.

What Is Non-Trucking Liability Insurance?

"Owners/operators under the authority of a motor carrier are covered by the motor carrier's primary Liability coverage in the event of an accident," explains Taylor. "The primary coverage provides door-to-door coverage for a particular job. However, once the truck is 'off duty,' there is no coverage under the motor carrier's primary Liability policy."

Enter Non-Trucking Liability insurance. It protects the owner/operator when not under dispatch and provides coverage for bodily injury and property damage in the event of an accident or third-party claim.

Contracts With Motor Carriers Often Require Non-Trucking Liability Insurance

Trucking contracts with motor carriers often require independent owner/operators to maintain Non-Trucking Liability insurance coverage as a condition of doing business. In addition, some independent contractors may have a lease/purchasing agreement for the truck with the motor carrier requiring Non-Trucking Liability.

"These lease agreements between owner/operators and motor carriers should be reviewed to ensure everything is accurate," emphasizes Taylor.

According to Taylor, the liability exposure for owners/operators when not under dispatch is relatively low, roughly 8% to 12%, which is why the premium for the coverage is much less expensive than for primary Liability coverage.

"For example, a policy for an owner/operator for one unit will run about $600 per year, while the primary Liability coverage can run anywhere from $5,000 to $10,000 annually," she says.

Taylor also says that, for new owners/operators, working under the authority of a motor carrier is a way to get into the trucking business.

"Often, the premiums for the primary Liability limits are so high for a new venture that it's not financially viable for an owner/operator to operate under its own authority. It's easier and more economical to operate under a motor carrier's authority and pay the lower Non-Trucking Liability premiums. Some owners/operators may eventually choose to operate under their own authority as the business matures," explains Taylor.

Physical Damage Coverage Available With Non-Trucking Liability

In addition to Non-Trucking Liability, RPS provides Physical Damage (Comp and Collision) coverage for the unit, along with Liability coverage.

"Although we primarily write both coverages together, we can write the Non-Trucking Liability as a stand-alone policy if the unit is old and the owner/operator doesn't want Physical Damage coverage," says Taylor. However, she notes that motor carriers will often require that the owner/operator carry Physical Damage coverage, as "our Physical Damage coverage portion applies 100% of the time — it doesn't matter if the unit is under dispatch or not.

"We have had an exclusive program for decades," says Taylor. "It's a unique class of business, with few insurers offering coverage due to the low premiums. Our staff has knowledge and longevity in the space and can provide coverage for clients."

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