Why Commercial Vehicle Insurance is Important for Your Fleet

August 9, 2021

Why Commercial Vehicle Insurance is Important for Your Fleet

Commercial Vehicle Insurance can play a key role in protecting your company from the financial burden of any accident that occurs with your fleet. However, many carriers don't fully understand how this type of insurance coverage works or what it actually covers. In this blog post, we will review the basics of Commercial Vehicle Insurance so that you are prepared for any incident that may occur in one of your company vehicles.

Commercial Vehicle Insurance—How it Works

Commercial vehicle insurance or fleet insurance protects multiple vehicles and drivers for a company. Motor carriers are required by law to provide a safe environment for their employees, which includes having adequate insurance coverage for all vehicles assigned to their fleet. 

Commercial vehicle insurance policies often offer the same coverage options as personal auto insurance and can provide your company with an even greater discount depending on your total fleet size. 

Motor carriers typically pay a premium to their insurer, just as you would for your own personal car insurance coverage. Similar to the coverage from an auto policy which covers any driver involved in an accident (regardless of whether they are at fault), the cost of your premiums goes up when the motor carrier is liable for crashes.

Claims are usually paid out by the insurer regardless of how much they make in premiums. Due to the fact that most trucking incidents are often more serious than those that occur between passenger cars, these insurance claims can often lead to substantial costs for the carrier.

Types of Coverages for Your Trucking Operation

The type of insurance coverage that would be the most appropriate for your business varies from carrier to carrier. Before selecting coverage, it’s important to understand who and what will be covered in the event of an accident with one of your employees and/or company vehicles. Some of the most common types of coverage are:

  • Primary Liability Coverage: This coverage does not cover your vehicle, but it protects your company from any damage that may happen to other individuals while operating your truck.
  • Truckers General Liability Coverage: For any truck driver that has to operate on someone else’s property like a truck stop or loading dock, this insurance coverage is there to protect your employee from any mistake in the delivery of the load.
  • Non-Trucking Liability Coverage: This coverage is for truck drivers who uses their company vehicle for personal use. If there are any injuries or damages to others while the truck is not under dispatch, this type of coverage can be useful.
  • Physical Damage Coverage: This coverage protects motor carriers from financial losses resulting from damage to their equipment caused by accidents or theft.
  • Motor Truck Cargo Coverage: This insurance policy covers your liability for cargo that is either lost or damaged due to incidents beyond your control. 

Average Cost of Commercial Vehicle Insurance

For motor carriers, the cost to provide adequate commercial vehicle insurance coverage to their fleet is an undertaking that cannot be avoided. The average insurance rate for motor carriers ranges between $12,000 to $16,000 annually per truck. There are a number of factors that insurers consider when determining your rates, such as the geographical area your trucks are located, the experience and age of your drivers, company credit history, and more.

Below are some of the average yearly costs for commercial truck insurance:

Coverage Type

Annual Average Cost

Primary Liability


General Liability


Uninsured or Underinsured Motorist


Umbrella Policy


Occupational Accident


Bobtail Insurance


Physical Damage: 


Source: www.cdl.com

The cost of insurance premiums can be a significant budget buster for most motor carriers. Consider the following best practices to help keep your rates low:

  • Ensure all employees operating your fleet maintains a clean driving record
  • Compare rates of multiple insurers
  • Pay for yearly insurance premiums upfront
  • Ensure all drivers have adequate CDL experience
  • When working with newer drivers, consider implementing a finishing school process - most insurance companies will be more likely to keep rates lower for entry level drivers receiving on the job training
  • Check your FMCSA record
  • Keep your logbooks up to date and DOT compliant

The Bottom Line

Investing in commercial vehicle insurance not only protects your drivers but also impacts your entire operation. Whether you operate a small fleet of one truck or a large fleet of 100+ trucks, evaluating and securing viable coverage options with a reputable insurance provider is a step in the right direction for your business.

TransForce Group has a long history of assisting customers to make the best business decisions. If you're looking for solutions to keep your fleet safe and compliant, contact us today! 

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