LOOKING TO SELL TRUCKING INSURANCE?
DON’T GET RUN OVER
The allure of high premium and appealing commissions attract countless numbers of insurance agents to the trucking insurance market. Whether chasing coverage for one independent contractor or a large group, the pitfalls of writing this coverage can be very dangerous if you don’t have a clear understanding of how it works. Providing occupational accident coverage for an employee driver or putting incorrect or inadequate coverage on a truck could end up resulting in a costly E&O claim. However, a good trucking agent can be a huge benefit in educating independent contractors or motor carriers and providing guidance on proper coverages.
NAVIGATING THE TRUCKING INSURANCE MARKET
Just like any other complicated insurance market, jumping feet first into the trucking insurance market requires a lot of industry and coverage specific knowledge. There are many different nuances that can affect the coverages you recommend. Coverage may vary based on state laws, the type of commodities hauled or whether the driver is an employee or independent contractor to mention a few. While this short writing cannot provide an overall guide, getting started in the trucking insurance market should, at a minimum, include getting properly educated in the market. Below is some information to get you started.
INDEPENDENT CONTRACTORS / OWNER OPERATORS
Most insurance companies do not provide coverage to just one trucker such as an independent contractor or owner operator. (Note, you will often see the terms independent contractor and owner operator used interchangeably in the industry. Be careful with this as it can be, but is not always the same thing.) When finding coverage for individuals, it may be necessary to access an association to obtain coverage. Associations can offer insurance coverage and will provide the driver additional benefits outside of insurance. The driver will be charged association dues to access the association, including the insurance. The insurance benefits and ancillary benefits will vary by association so it is beneficial to review more than one before moving forward.
GROUP TRUCKING INSURANCE
Writing group insurance for trucking companies can be even more complicated. Do you recommend workers compensation or occupational accident coverage for the drivers? Some motor carriers elect to have all company owned equipment that is driven by employees. Other
companies elect to contract only independent contractors with their own equipment to haul for them. And finally, some companies elect to have a combination of both company drivers and equipment as well as independent contractors with their own equipment. All of these
factors directly affect the types of coverages needed. So, it is crucial to have a very thorough understanding of the coverages that are appropriate in each situation.
COVERAGE LAWS AFFECTING TRUCKING INSURANCE
In addition to the types of equipment, drivers and commodities that affect insurance recommendations, coverage laws can also vary greatly by state. For instance, some states may consider independent contractors to be employees if very specific and critical criteria is not met. This could require the drivers to be covered under workers compensation as opposed to occupational accident coverage. There are some nightmare stories out there where trucking companies have had their drivers covered under occupational accident coverage who were later charged back on the trucking company’s worker’s compensation audit, costing tens of thousands in additional workers compensation premium. As you might imagine, this can create a very tense situation between the trucking company and their insurance agent.
Some states require waivers or selection forms to be signed for specific coverages such as uninsured motorist coverage and personal injury protection. As trucking companies often have drivers residing in many different states, you can see how quickly the factors affecting coverage recommendations can add up.
SO, DO I REALLY WANT TO WRITE TRUCKING COVERAGE?
The point of this writing is not to scare you away from writing trucking insurance. To the contrary, trucking insurance can be very lucrative. But before getting involved, get educated so your experience in trucking insurance can be long and profitable. Here are some ways to start getting educated.
GET INVOLVED IN THE TRUCKING INDUSTRY
Getting involved in the trucking industry through various organizations can assist in understanding trucking and different insurance coverages required and available. Look into your local state trucking association to obtain education. Subscribe to industry publications such as Transport Topics or subscribe to newsletters published on a regular basis by trucking law firms. There are nationwide trucking associations like American Trucking Association (ATA) and the Truckload Carriers Association (TCA) that promote the interests of truckers and trucking companies at the state and federal level. These organizations will allow you to understand current hot topics and legislation that may affect the trucking industry as well as insurance coverage.
CONSIDER A MENTOR OR TRUCKING WHOLESALER
Finally, learn how to provide solutions for your clients or potential clients that will prove your worth. The important thing is to never attempt to “wing it” if you don’t know the answer. Often times, trucking companies are just as educated about their coverage needs as their agents. Giving an option that the client knows to be incorrect can not only end a relationship, but can ruin your reputation in the industry. If you don’t know the answer or proper recommendation get assistance from another professional. Partnering with a wholesaler that specializes in trucking insurance is a great option. Not only can they educate you as to the ins and outs of trucking insurance, but they can also be valuable in other areas such as servicing the account and accessing markets.
WHERE DO YOU GO FROM HERE?
If you are considering adding trucking insurance to your portfolio of commercial coverages, contact our office to discuss some options we have to get you started. Let us help you navigate the trucking insurance market without getting “run over”. Give us a call or shoot us an email: