Introduction
Whether you are operating your trucking business under your authority or permanent lease to a motor carrier, it is crucial that you understand the various types of insurance coverages that are available to protect you in the event of an accident. Two popular types of insurance coverage available to operators under a lease are Bobtail Insurance and NonTrucking Liability Insurance.
Bobtail Insurance
Suppose you are driving without a trailer after you drop off your load at a destination and are heading to another location. In that case, you are able to protect yourself from expenses related to certain accidents such as vehicular collisions or a branch falling on your windshield with Bobtail Insurance.
Do I need Bobtail Insurance?
Bobtail coverage is usually for drivers under a lease agreement with motor carriers. Most motor carriers require Bobtail Insurance as part of the contract.
Exceptions and Restrictions for Bobtail Insurance
According to International Risk Management Institute, Inc, Bobtail insurance gives coverage to the truck once it’s not attached to the trailer, whether or not it’s under dispatch. It does not offer protection for physical damage to your truck. It covers legal fees, settlement expenses, and medical bills.
What does Bobtail Insurance Cover?
Bobtail Insurance offers coverage against accidents that occur while delivering and picking up the next load, on your way to pick up the first load, and on your way home from a delivery.
What does Bobtail Insurance cost?
The cost for Bobtail Insurance is based on factors like driving history, the limits requested, and how many times the truck is used without a trailer. It usually costs between $20 and $50 per month.
Non-Trucking Liability Insurance (NLT)
This type of insurance offers you coverage if you operate the vehicle without economic benefit to a carrier or yourself as the owner-operator.
For example, when you use your truck for your personal benefits, like, going to the supermarket, a game, or visiting friends, if you harm people or damage their property with your truck, you can be protected by Non-Trucking Liability. NLT will help you pay for their medical expenses and cover other costs linked to their injury or damaged property.
Exceptions and Restrictions for NTL
You cannot get non-trucking liability coverage for any form of business use. Some scenarios that may be seen as a form of business include washing your truck, getting fuel, going for any vehicle maintenance or servicing, and deadheading (driving without a load). These would instead be covered by primary liability from the carrier. Also, one should note that NTL does not give liability coverage when you’re using the vehicle for any business purpose or when pulling a loaded trailer. According to International Risk Management Institute, Inc.
, NTL is not available with policies with a state filing, MCS-90, FHWA (federal/ICC), or SR22.
The difference between Non-Trucking Liability and Bobtail Insurance
Many people frequently use the terms Non-Trucking Liability and Bobtail Insurance interchangeably. However, they are not the same thing, and an owner-operator who wants a successful trucking business while protecting themselves should make careful note of this. Non Trucking Liability covers owner-operators from liability claims when the truck is not being used for non-revenue gaining reasons, regardless of whether a load is attached or not. With Bobtail insurance, owner-operators are protected from liability claims during assignments for carriers and personal use, as long as no trailer is attached.
