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What is Primary Trucking Liability?

Primary liability insurance is a crucial component of any commercial truck insurance package. It is mandatory for all commercial trucks, providing financial protection for bodily injury and damage. Driving commercial vehicles without primary liability insurance can result in fines and penalties, making it essential to trucking operations.

The Difference Between Primary Liability
and General Liability Insurance

There is much confusion between primary liability insurance and general liability insurance. The key difference is that general liability covers accidents that occur off the road, such as someone slipping and falling at your headquarters. Primary liability insurance, on the other hand, only provides coverage while your truck is on the road.

Primary liability covers the unique risks and liabilities associated with the operation of commercial trucks, particularly those involved in the transportation of goods. This type of truck insurance is typically mandatory for motor carriers engaged in intrastate commerce as per regulatory requirements. This policy covers liabilities directly associated with an accident or incident involving the insured truck during business operations, such as injuries to others and damage to property.

General liability, by comparison, is a basic form of insurance that applies to a wide range of businesses, not just the trucking business. It is relevant for businesses that want comprehensive coverage for general business liabilities, such as slip-and-fall accidents, property damage at business premises, and advertising-related claims.

While the former is specifically tailored for the trucking industry, addressing liabilities related to the operation of commercial trucks, general liability insurance provides broader coverage for general business liabilities and is not specific to the transportation sector. It is common for a trucking business to carry both types of insurance to ensure comprehensive protection.

primary liability insurance helps mitigate risks in commercial trucking

What Does Primary Liability Insurance Cover?

The Federal Motor Carrier Safety Administration (FMCSA) sets the minimum amount for primary liability coverage based on a truck’s Gross Vehicle Weight Rating (GVWR). For vehicles that weigh over 10,000 pounds GVWR, the FMCSA sets the following minimums:

  • $750,000 – Most trucks carrying commodities must have a minimum of $750,000 of coverage. Many load brokers will require a minimum of $1,000,000.
  • $1,000,000– Auto haulers need a minimum of $1,000,000 in coverage. One million in coverage is becoming an industry standard across other hauled commodities too.
  • $5,000,000– If you are hauling certain hazardous materials, you’ll need a minimum of $5,000,000 in coverage.

 

It’s worth noting that primary liability does not cover you or the truck. It is meant to protect against damages you may cause to others and their property. For theft-related coverage, bodily injury, or damage to your truck, you’ll need other types of insurance.

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Who Should Get Primary Liability Insurance Coverage?

Primary liability insurance coverage is a fundamental requirement for various stakeholders involved in the commercial trucking industry. The need for it is typically dictated by regulatory authorities and industry standards.

Here are the key entities that need primary liability insurance coverage in trucking:

Motor Carriers/Trucking Companies

Motor carriers or trucking companies that operate commercial trucks for the transportation of goods are required to have primary liability insurance coverage. This coverage is essential for protecting the carrier against bodily injury and property damage claims that may arise from accidents involving their trucks.

Owner-Operators

Owner-operators, who own and operate their own commercial trucks, are also required to carry primary liability insurance. This coverage is necessary for protecting the owner-operator against liability claims in case of accidents or incidents involving their truck.

For-Hire Carriers

For-hire carriers that provide transportation services for a fee must have primary liability insurance coverage. This is a regulatory requirement and is necessary for obtaining and maintaining operating authority.

Private Carriers

Private carriers, which operate trucks for the transportation of their own goods rather than for hire, are typically required to carry primary liability insurance. This coverage is necessary for protecting against liability claims arising from accidents involving their trucks.

Interstate Carriers

Carriers that operate across state lines, engaging in interstate commerce, are subject to federal regulations, including the requirement for primary liability insurance.

Leased Operators

Motor carriers that lease trucks and equipment from owner-operators may also require leased operators to carry primary liability insurance. This ensures that both the motor carrier and the leased operator have appropriate coverage in the event of an accident.

Primary Liability Requirements for Trucks

The specific requirements can vary based on factors such as the type of operation, the nature of the cargo, and whether the carrier engages in interstate or intrastate commerce. Here are some key aspects of primary liability insurance requirements for commercial trucks:

Bodily Injury and Property Damage Coverage

Primary liability insurance for commercial trucks must provide coverage for bodily injury and property damages. Bodily injury coverage pays for injuries to others, while property damage coverage pays for damage to the property of others resulting from an accident.

Insurance Filing Requirements

Carriers are required to file proof of insurance with the FMCSA. This is typically done through the Unified Registration System (URS), and carriers must renew their filing annually. The insurance filing serves as evidence that the carrier has the required coverage.

Cargo Type and Special Endorsements

The type of cargo being transported may affect insurance requirements. For example, carriers transporting hazardous materials often require higher insurance limits. Special endorsements or coverages may be needed for specific types of cargo.

State-Specific Requirements (Intrastate Commerce)

For carriers engaged in intrastate commerce (operating solely within a single state), state-specific insurance requirements may apply. These requirements are set by individual state authorities, and carriers need to comply with the insurance regulations of the state(s) in which they operate.

Lease Agreement Compliance

Carriers that lease equipment from owner-operators or leased operators may have specific insurance requirements outlined in lease agreements. Both the motor carrier and the leased operator must ensure compliance with these requirements.

Since insurance regulations may change, check with the FMCSA and relevant state authorities or consulting with an insurance professional for the most up-to-date information on primary liability insurance requirements for commercial trucks.

Primary liability insurance requirements may change over time, so check with the FMSCA for updates

What Does Primary Liability Insurance Exclude?

While primary liability insurance in trucking covers a range of liabilities, there are certain situations and types of losses that may not be covered by this specific insurance. Here are some common exclusions:

  • Cargo Loss or Damage: It typically does not cover damage to or loss of the cargo being transported. For cargo coverage, motor carriers may need additional cargo insurance.
  • Physical Damage to the Truck: It does not cover physical damage to the insured truck. Damage to the truck itself, whether from collisions, theft, vandalism, or other perils, falls under physical damage coverage and companies may need a separate policy for this coverage.
  • Non-Trucking Liability: If the truck is being used for non-business or personal purposes, primary liability insurance may not provide coverage.
  • Equipment Breakdown: Breakdowns due to mechanical failure or equipment malfunctions are typically not covered by primary liability insurance.
  • Employee Injuries or Occupational Diseases: The policy typically does not cover injuries or illnesses suffered by employees. Workers’ compensation insurance is designed to cover medical expenses and lost wages for employees injured on the job.
  • Intentional Acts or Criminal Activities: Acts committed intentionally or as a result of criminal activities may not be covered by primary liability insurance. The policy typically excludes coverage for intentional wrongdoing.
  • Contractual Liability: Liability assumed by contract, unless it would exist in the absence of the contract, may not be covered. For example, if a motor carrier assumes liability for certain risks in a contract, the primary liability insurance may not cover those assumed liabilities.
  • Pollution Liability: Primary liability insurance may exclude coverage for pollution-related liabilities. If a trucking operation involves transporting hazardous materials, additional coverage for pollution liability may be necessary.
  • Fines and Penalties: Primary liability insurance usually does not cover fines or penalties imposed by regulatory authorities.

Businesses should carefully review their truck insurance policies, including endorsements and exclusions, to fully understand the scope of coverage and any limitations. Depending on their specific needs, operational risks, and other factors, additional insurance policies may be required to fill gaps in coverage.

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