If your business involves transporting people, equipment or other goods, you need insurance protection designed to mitigate risks in the event an accident or other loss occurs. Commercial transportation insurance is protection designed specifically to serve the needs of businesses involved in moving people or cargo.

Whether you have a large fleet of semi-trucks traveling cross-country every day, use public carriers to transport goods or own a handful of limousines that serve your local community, it’s important to understand your risks – and your coverage options.

What Do Commercial Transportation Policies Typically Cover?

Having the right insurance coverage can mean that when accidents or other unforeseen events occur, your business operations won’t bear the full financial impact of the loss.

Commercial transportation insurance coverages will vary from policy-to-policy, but typically include coverage for losses incurred from collisions, breakdowns, loading and unloading cargo, debris removal, clean-up, earned freight charges and cargo theft.

Whether you are transporting property using your own vehicles or through a public carrier, losses can occur at any time.

Different Coverage Elements Protect Businesses in Different Ways

Auto Liability Coverage

This protects your business if one of your vehicles is responsible for causing an accident. Commercial vehicles are generally larger and heavier than passenger automobiles; that can make resulting damages and injuries significantly worse. In many cases, accidents involving large trucks are fatal. In 2015 (the most recent year for which data is available), there were 4,311 fatal truck and bus crashes in the United States.

Your automobile liability coverage will pay to defend you against wrongful death claims, pay for damage to other people’s’ or other companies’ property and for medical expenses of others injured by an accident your driver causes.

Auto Physical Damage Coverage

Comprehensive and collision coverage for your commercial vehicles are designed to pay for the expenses of repairing or replacing your own vehicle after an accident or other non-accident covered loss occurs, and for paying your drivers’ medical expenses.

General Liability Coverage

Your general liability coverage is designed to mitigate your risk of loss for property damage or personal injuries that aren’t directly related to operating your covered commercial automobiles. For example, if someone falls and is injured on your business premises, or if your business is sued for libel or slander, general liability protection can shield you from financial loss.

Motor Truck Cargo Coverage

If your business involves transporting cargo from point A to point B, you probably need motor truck cargo coverage. This type of insurance protects the cargo you are hauling. If you are in an accident and the cargo is damaged or destroyed, or if it is lost, your cargo coverage will protect your business from having to absorb the loss. This type of coverage may also pay for the cost of removing cargo dumped on a roadway, freight charges you incur as a result, and legal claims settlement expenses.

Trailer Interchange Protection

Businesses that pull trailers for other businesses (non-owned trailers) under a trailer interchange agreement need coverage for the cargo or containers they are hauling. Trailer interchange coverage is designed to protect you from loss in the event a trailer you are pulling (but don’t own) is stolen, damaged by fire or vandalism, explodes or is involved in a collision.

Cargo theft in 2016 resulted in nearly $27 million in property being stolen in the U.S., of which less than one-third was recovered.

Hired/Non-Owned Auto Coverage

If your business leases its fleet of vehicles, rents them or otherwise borrows automobiles, hired/non-owned auto coverage is essential so your company won’t be on the hook if an accident or other loss occurs.

Typical Policy Exclusions

Again, check with your insurance agent and read your policy to understand what the insurance company will cover – and what they will exclude. Generally speaking, insurance coverage under basic commercial transportation insurance policies is not available for certain types of cargo including:

  • Money
  • Jewelry
  • Alcohol
  • Tobacco
  • Pharmaceuticals
  • Contraband
  • Live animals
  • Property in another carrier’s possession
  • Explosive materials

However, you may be able to purchase specialized coverage to meet some of these risks.

It’s also important to note that trailer interchange coverage is only effective when you have a written trailer interchange agreement in place, and is only available for tractors and pickups.

Factors that Can Influence the Cost of Commercial Transportation Insurance

The amount you will need to pay to insure your business will depend on a number of factors, including:

  • The types of vehicles you own, lease or operate
  • The number of vehicles you need to insure
  • The geography where you conduct business
  • Where vehicles are stored when they’re not in use
  • The kinds of cargo your vehicles haul
  • How many miles your drivers are on the road each day
  • Your drivers’ experience and driving history
  • The amount of coverage you choose
  • Your policy deductibles. Choosing higher deductibles is one way to lower your premium cost, however doing means your company will have to foot a higher portion of the bill if a loss occurs.

Your Commercial Insurance Professional Can Help Tailor Coverage to Your Needs

The consequences of being uninsured or underinsured can be significant and long-lasting. Don’t take the risk of having your business operations derailed because you didn’t have enough of, or the right kind of, commercial transportation insurance. Talk to your business insurance agency about which of these, or other, coverages can best protect your business.