How much does owner operator insurance cost?

Trucking businesses, including those run by owner operators, pay an average of $816 per month, or $9,794 per year, for commercial vehicle insurance.

This policy pays for legal fees, medical treatment, and repairs if your truck gets into an accident. It can also cover vehicle theft, vandalism, and weather damage.

Most states require commercial auto insurance coverage for vehicles owned by a business. For personal, rented, and leased vehicles used for work purposes, look to hired and non-owned auto insurance (HNOA) instead. The amount of auto liability insurance you need for any vehicle depends on your state laws.

The Federal Motor Carrier Safety Administration (FMCSA) regulates insurance for motor carriers and others in the trucking industry. You will likely need $750,000 in primary liability insurance and $5,000 in motor truck cargo insurance, though it depends on your vehicle's weight and the type of cargo you transport.

Your clients and shippers will expect you to have cargo insurance, and may require a certain amount of this coverage in their contracts.

Other trucking insurance policies you might need include:

• On-hook towing insurance for towed vehicles
• Garage keepers insurance if you store client vehicles
• Trailer insurance if your policy doesn't cover your trailer
• Trailer interchange coverage if your business uses a trailer that you don't own

Finally, you should consider non-trucking liability insurance for coverage while you're driving a truck off duty, and bobtail insurance for any driving that occurs without a trailer, such as between loads.

Insurers look at several factors when determining commercial truck insurance costs. That includes the number and type of trucks you have, how often they are driven, the value of your cargo, the services you provide, and the driving history of your employees.

For instance, hotshot insurance will cost less than semi-truck insurance, and it's usually less expensive to transport household goods than hazardous materials.

The coverage options you choose, such as physical damage coverage or an additional insured endorsement, will also influence how much you pay for auto insurance.

Driver safety is another important consideration. It'll cost less to insure employees with a clean driving record than those with accidents in their past.

Other ways to reduce your truck insurance rates include opting for lower limits or a higher deductible, and skipping costly add-ons like comprehensive coverage and other kinds of physical damage insurance unless you need them.

Owner operators and other types of truckers pay an average of $51 per month, or $606 annually, for general liability insurance.

Also called public liability insurance, this type of coverage pays for legal costs related to third-party bodily injuries and property damage. For example, a client might trip over one of your dollies and break their ankle, or damage their smartphone in the fall.

This policy also helps pay for legal fees if someone sues your business over an advertising injury, such as copyright infringement or defamation. For instance, a competitor might sue your business if your company's logo or slogan is too similar to their own.

Below is the average general liability policy for trucking companies that buy from Insureon:

Insurance premium: $51 per month
Policy limits: $1 million per occurrence; $2 million aggregate
Deductible: $750

The per-occurrence limit is the maximum your insurance company will pay for a single covered incident, while the aggregate limit is the most the insurer will pay for all covered claims during the policy period, typically one year.

Insurance companies consider several factors when calculating the cost of your general liability policy. That includes your business operations, your revenue, insurance options such as an additional insured, and the policy limits and deductible you choose.

The amount of coverage you need depends on your risk of a customer lawsuit. Businesses that have frequent interactions with customers are considered high risk, as the likelihood of an accident and lawsuit increases.

Owner operators with small, low-risk businesses can save money on general liability coverage by buying it together with commercial property insurance in a business owner's policy (BOP). This cost-saving bundle protects against both common third-party lawsuits and damage to your office and business property.

For trucking companies and owner operators, the average cost of workers’ compensation insurance is $650 per month, or $7,795 annually.

This type of insurance covers medical expenses related to employee injuries, such as a driver who slips and falls while getting out of their truck. It also provides disability benefits while an employee is disabled or temporarily unable to work.

Most workers' comp policies include employer's liability insurance to protect against lawsuits from injured workers, though they give up their right to sue once they accept benefits.

Businesses with employees typically must purchase workers' comp to comply with state laws and avoid penalties. For example, businesses in California and New York must carry workers' comp if they have one or more full-time or part-time employees. Florida businesses need coverage when they have four or more employees, and coverage is optional in Texas.

Since health insurance plans can deny claims for injuries related to your job, sole proprietors and independent contractors may choose to buy workers' compensation coverage as a financial safety net and for peace of mind.

Another option is occupational accident insurance (OAI), which provides a cost-effective alternative when workers' compensation isn't available.

The cost of workers' comp depends on several factors, primarily the number of employees you have and their occupational risks. It's important to classify your employees correctly, from truck drivers to office workers, to ensure you're not overpaying for your policy.

As with other types of insurance, a workers' comp claim will result in a higher premium. Owner operators can save money in the long run by implementing worker safety programs, such as one that teaches safe lifting techniques, to avoid injuries and subsequent claims.