August 20, 2020
For new trucking ventures, honesty is the best insurance policy
So you’ve just established a trucking company and are eager to score your first load. You’ve bought a truck and obtained CDL, MC and USDOT numbers. It’s time to start hiring drivers, right? Almost. But don’t forget to hit the road without proper insurance.
The rules of the road apply to all commercial drivers; not a single carrier can outrun the consequences that follow an accident. That is why it’s important that new entrants understand the industry’s risks and equip themselves with the proper insurance to cover all liabilities.
Thankfully, that’s where new venture trucking insurance comes along. Protecting your company with policies that cover auto and physical damages to drivers and others involved in addition to losses and/or damages to cargo are the basic liabilities that motor carriers are expected to cover.
Reliance Partners’ Director of Sales Morgan Thomas guides new carriers through the insurance ins and outs of what they can expect during their first years in operation. She understands that the years one and two can be challenging for new companies, especially if they lack prior industry experience.
While some insurers may be hesitant to cover new entrants, Thomas said she’s up for the challenge. “What I like about new venture trucking insurance is that I get to grow with the companies. If they can trust me, then it’ll make the whole process easier.”
According to Thomas, what first circles the minds of new entrants is rates. Will they be high or low? She made it clear that motor carriers should expect to receive higher rates within its first year or two of operation.
Thomas clarified that rates are heavily contingent on the operators’ years of experience in addition to the location of the business, type of freight hauled and the age of the trucks and other equipment used in the daily haul. For those without prior trucking experience, Reliance Partners suggests exploring other ways to land lower rates such as maintaining an impressive credit score.
Rates typically go down as companies gain more experience, considering its record of safety is consistent and its Inspection Selection System (ISS) score remains low, among other factors. Keep in mind that insurance rates differ for each motor carrier. One shouldn’t expect to receive rates similar to that of another company based on assumptions.
Insurance agents would also like to learn about your company’s future. One of the first questions that Thomas asks new carriers is how they plan to grow their business over the course of the year to determine the insurance market most appropriate for their business. Thomas clarified that some insurers may require new ventures to operate on a one-unit operation for the first year or even max them out at two or three units.
Thomas recommends new ventures not to stray outside the parameters of their insurance policies. She considers rapid growth within the first year to be a red flag as motor carriers may risk exceeding the limits of their coverage.
“Being completely transparent with your insurance provider helps establish a relationship and allows the insurer to represent the trucking company in the best way possible,” Thomas said. “Honesty is the best insurance policy.”
Reach out to Reliance Partners to learn more about the new venture programs it offers to motor carriers and owner-operators.
