Do You Need Different Insurance for Company Drivers vs. Owner-operators

When it comes to commercial auto insurance, the distinction between an owner-operator driving their own vehicles and employing drivers to do so is more than just a matter of logistics. Who gets behind the wheel of company vehicles often significantly impacts your insurance needs, risk exposure and coverage requirements.

Owner-operated Vehicles: Maintaining Coverage in Various Scenarios

Even if you personally own your truck, you’ll typically still need to make sure you have appropriate commercial auto insurance. Your policy should adhere to Federal Motor Carrier Safety Administration requirements regarding liability coverage, as well as any applicable state mandates. If you’ve financed your truck, you may also be required to carry additional coverage, such as for physical damage.

Should you choose to contract with a motor carrier or other business entity, they’ll be responsible for providing primary liability coverage while you’re making deliveries for them. However, you should still retain a policy with alternative coverage, such as bobtail liability coverage for once you’re finished with a job and physical damage coverage to offset losses involving your vehicle.

Employing Drivers: Higher Risk, Broader Coverage

If you’re a business that employs drivers, your risk profile can differ significantly compared with owner-operators. In these situations, you’re responsible for the actions of others behind the wheel, which introduces new variables for which you must account, including employees’ driving history, training and behavior. Insurers often assess your perceived risk levels based on your hiring practices, drivers’ records and vehicle usage.

When employing drivers, you’ll want to make sure your insurance addresses the following potential needs:

• Employers’ liability coverage, such as that available through workers’ compensation insurance, may financially protect against claims if an employee is injured while driving.

• Increased third-party liability limits may be necessary, as employing more drivers often means higher risk levels and greater potential losses involving clients and the general public.

• Non-owned vehicle coverage can offer additional coverage if employees use their personal cars for business purposes.

We’re Here to Help

Whether you’re an owner-operator working independently, contracting with motor carriers or managing a team of drivers, aligning your coverage with your operational realities is essential to financially protect your assets and maintain business continuity.

At Insurance Solutions Center, we can help you address and update your coverage. Contact us today to get started.

This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.