Primary auto liability

How does primary auto liability work for a trucking operation?

Primary auto liability covers what you are legally responsible for when your truck hurts someone or damages their property: another driver's injuries, a car you hit, a guardrail, a building. It generally pays damages and your legal defense, up to the limit on your policy, for covered claims. The limit is the most the policy will pay for a covered accident, so the number on your declarations page matters as much as the coverage name.

Federal law defines "public liability" as liability for bodily injury or property damage, including liability for environmental restoration.

Federal financial responsibility. Federal rules require motor carriers to have a minimum level of financial responsibility in effect before they operate a motor vehicle, and to keep it in effect continuously until it is terminated. The rules apply to for-hire motor carriers transporting property in interstate or foreign commerce, and to carriers transporting hazardous materials in interstate, foreign, or intrastate commerce. Vehicles under 10,001 pounds gross vehicle weight rating are generally exempt, with exceptions for certain dangerous materials. For a for-hire carrier hauling nonhazardous property in a vehicle with a gross vehicle weight rating of 10,001 pounds or more, the minimum is $750,000. Higher minimums, $1,000,000 and $5,000,000, apply to certain hazardous materials. Read the schedule in the regulation for the material you haul. Rules for operations inside a single state are different, so check your state's requirements too.

Proof of coverage. The federal minimum can be shown with an endorsement on an insurance policy (Form MCS-90), a surety bond (Form MCS-82), or an approved self-insurance decision. The MCS-90 is an endorsement form prescribed by FMCSA; ask your agency or insurer how it applies to your policy and read the form. Insurers also file certificates of insurance with FMCSA (Forms BMC-91 or BMC-91X) for covered carriers. Cancelling either way takes written notice: the regulation says the insurer or the insured carrier must give 35 days' written notice to the other.

A federal minimum is a floor, not a recommendation. Shippers, brokers, lenders, and contracts can ask for higher limits than the regulation requires.

What does primary auto liability cover, and what doesn't it?

Policies vary. Read your declarations, definitions, and exclusions. In general:

Often covered

• Bodily injury to other people caused by the operation of a covered truck
• Damage to other people's property, such as vehicles, guardrails, and buildings
• Legal defense costs for covered claims, under many policies
• Covered units listed on the policy, or operated under the conditions it describes

Often not covered

• Damage to your own truck or trailer. That is physical damage.
• Loss of or damage to the freight you haul. That is motor truck cargo.
• Injuries to you or your drivers. That is workers' compensation or, for independent contractors, occupational accident. These are not the same thing.
• Use outside what the policy describes, such as an unlisted unit, an unlisted driver, or a type of haul the policy excludes
• Intentional acts and certain hazardous-material or pollution losses, depending on the policy and any endorsements

The two ways primary liability most often goes wrong are the wrong description of your operation on the policy and a unit or driver the policy doesn't list. Check both when the policy is issued and again whenever you add a truck or driver.

What affects the cost of primary auto liability?

We don't publish prices, and cost is set by insurers and the licensed agents you work with, not by BreadRoute. These are the factors that generally move it:

• Radius and routes. How far you run and where, including states and metro areas
• What you haul. The commodity, and whether any of it is hazardous
• Units. How many, their type, weight class, and age
• Drivers. Experience, license class, and driving records
• Your history. Time under authority, safety record, and past claims or loss history
• Limits and deductibles. Higher limits and different deductibles change the price
• Filings and requirements. Federal filings, plus anything a broker, shipper, or lender requires
• Where you garage. Where units are parked or based

New-authority carriers often have fewer options because there is less history to review. No one can promise what an insurer will offer.

Who typically needs primary auto liability?

• New authority: If you run under your own authority, this is usually the first coverage to sort out, and the one federal rules most directly touch.
• Small fleets: Each added unit and driver needs to be on the policy. Ask how your agency handles adding and removing units.
• OTR and local haul: Radius and routes drive the details, so describe your lanes accurately.
• Couriers: Lighter vehicles may fall under the weight threshold in the federal rules, but customers and contracts often ask for liability coverage anyway.
• Towing and repair: Wreckers and service trucks are on the road too and need liability coverage. Towing has its own coverages, such as on-hook towing.
• Owner-operators leased onto a carrier: The carrier usually carries primary liability for freight you haul under its authority. See bobtail and non-trucking liability for when you are not under that carrier's dispatch.