If you own and operate a truck or are the owner of a small trucking company, you know that you need plenty of insurance to operate safely. The Federal Motor Carriers Safety Administration requires trucks that weigh over 10,000 pounds, cross state lines and carry freight to have $750,000 to  $5,000,000 of liability insurance, depending on what they carry. Trucks that carry household goods, such as moving companies, must have $5000 of insurance for each vehicle and $1,000 for each incident. You can find more here.

You will need much more insurance than the minimum amount required by law. You would not have a business if it were not for your clients, and you need to ensure that your product gets from one place to another in one piece. If you’re a new company, you can’t afford to lose customers and certainly cannot afford a bad review. Hence, you must make your clients feel their products are safe when they’re in your hands.

Contractual Specifications

When you take on a new client, you will make a contract with them. That contract will have a clause containing specific details about the amount of cargo insurance you will have. The contract will outline the damages your insurance policy will pay for, and what kinds of occurrences are excluded.

Most clients will want you to cover the wholesale value of their products at a minimum. When products are damaged or stolen, the products will never be sold, and the store you were taking them to will lose money. Your client should have their own insurance to cover profits lost by a retailer.

Consider The Type of Products You Haul

It may seem as though it’s a good idea to carry any kind of cargo you’re asked to carry. However, it’s always a good idea for a trucking company to start with simple products. You will need far more cargo insurance if you haul gold bricks or livestock than if you carry dry food products or kitchenware. There is even certain cargo that you will need a special license to carry.

Other Benefits of Cargo Insurance 

If your driver causes an accident, cargo insurance can be essential. If cargo spills onto the road, some liability policies will not cover clean-up. Fortunately, there are cargo insurance policies that will cover the cost of removing products your trucks have spilled on the road.

What Cargo Insurance Will Cover?

Any good cargo insurance policy should cover the products you’re shipping. If they’re damaged in a collision, damaged by the elements, or stolen. Some insurance policies list named perils from which your cargo should be protected, and others will cover anything that might happen. 

Even policies that say they will cover anything will often have certain exclusions. Typical exclusions will include acts such as natural disasters, civil unrest, such as protesters commandeering a truck, or negligence on the part of your client. An insurance company may also refuse to pay you if your products get damaged in an accident when your driver is under the influence of drugs or alcohol.

How Do I Know exactly How Much Insurance to Buy?

The best way to know the exact amount of insurance you should have is to consult with an insurance agency specializing in trucking. It’s even better to find a trucking compliance agency that also offers insurance services. They’ll have many types of cargo claims, and they will be able to tell you what to look for in a policy and what to avoid.

Running a trucking company can be stressful. Having plenty of cargo insurance will make both you and your customers feel happy and secure.

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