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OWNER OPERATOR INSURANCE


Owner operators are individuals who own their own trucking business. They may operate under their own authority under their own MC number or they may lease on to another motor carrier.  We will discuss owner operator insurance coverage types.

If you want your own authority, you will need to apply for this through the Federal Motor Carrier Safety Administration (FMCSA). You will need to prove that you have the minimum liability limits as required by FMCSA and pay a $300 filing fee. You can go to their website at https://www.fmcsa.dot.gov/registration/get-mc-number-authority-operate to see the steps to apply for your own authority.

If you do haul under your own authority, then you will need to have these required limits of auto liability, (in some cases) cargo liability, and an active MC number. The proof of insurance, as sent to the FMCSA by your insurance company, are referred to as filings. These filings are delivered to the FMCSA as proof that you have the minimum liability limits.

For those not hauling under their own motor carrier authority, we want to discuss several coverage options.

NON-TRUCKING LIABILITY and BOBTAIL LIABILITY

If you decide to lease on to another motor carrier and haul under their authority, then they will carry the primary liability insurance. If this is the case, you still need to have a non-trucking liability insurance policy. This covers you when you are not under dispatch for that motor carrier. Non-trucking liability is also commonly referred to as bobtail liability. This is not accurate. We will discuss the difference later in this article.

The cost is typically much less for this coverage type then truckers liability insurance due to the limited time that coverage come in to play. You do not want to be without this coverage in the event that you are in accident when you are not driving under another carrier’s authority.

PHYSICAL DAMAGE COVERAGE

If you are financing your truck then the lienholder or bank will require you to have physical damage coverage to cover the damage to the vehicle in the event of a claim. This comprehensive and collision coverage will cover those losses.

Even if you are not financing the vehicle, you want to seriously consider this coverage to put you back to where you were before the accident occurred.

CARGO INSURANCE

Cargo insurance covers the load you are hauling. Depending on several factors, the FMCSA may require you to have a certain amount of cargo insurance. Even if this isn’t required by the FMCSA then you may be required to have it by the contract you are in with the motor carrier. There are various coverage and deductible options for cargo insurance. You will need to explore these options versus the requirements you may have along with what suits your needs.

TRUCKER’S GENERAL LIABILITY

Trucker’s general liability or motor truck general liability covers losses to property damage or bodily injury due to your negligence, not related to operating your truck. This is the least common coverage type of those discussed but you may have a contract requirement that would cause you to purchase this insurance.

The expense of this policy is generally much cheaper than the other coverage types so you should consider purchasing this policy even if it is not required, to protect yourself from any coverage gaps.

WHAT IS THE DIFFERENCE BETWEEN NON-TRUCKING LIABILITY AND BOBTAIL LIABILITY

Non-trucking liability typically comes into play when you are using your truck for any personal use whatsoever. If you are involved in a large accident then it will be up to the insurance carriers, and in some cases, the courts to determine who is responsible for paying for the damages. The motor carrier you are hauling for would be responsible for the liability while you are driving under their authority. It is also in the opinion of the court in many instances that they would also be responsible for liability losses during your drive home.

Bobtail liability will cover you when you not hauling a load or trailer. If you drop off a load for one carrier and you are on your way to pick up a load for another carrier, this is when your bobtail liability would come into play.

The FMCSA will not require you to have non-trucking liability or bobtail liability since you are not under motor trucking authority. Many contracts will also not require this coverage from you since they are only responsible when you are hauling for them. This leaves the choice up to you. Since you own your truck, when there is a loss you will be responsible. When a loss occurs while driving a large truck, the loss amount can be significant and could cripple you and your business financially. Don’t wait until after the loss to consider this very important coverage.

Trucking can be a very lucrative career and the need for this industry doesn’t seem to be going away anytime soon. The start-up of a trucking company can be a daunting task. The insurance part of that start-up is probably one of the most common areas of confusion to new businesses and trucking veterans alike. We realize this and have therefore put a trained staff in place to help you with any questions. Please contact us at 704-494-9495 for any help with these topics.

 

BAR AND NIGHT CLUB INSURANCE

Bars and night clubs have various insurance coverage needs that are exclusive from those of many other kinds of businesses. We will talk about many of those different coverage options that will protect your business from various types of insurance claims.

Many companies shy away from offering coverage for certain types of risks like night clubs, restaurants, wine bars, topless clubs, cigar bars, lounges, hookahs, sports bars, dance halls, comedy clubs, and pool bars just to name a few. You will want to make sure that you do your research and find a company that will not only give you a reasonable premium, but will also offer the coverages you need.

You never know when you will have a claim and you don’t want to be at risk for having certain exclusions on your policy when it is too late. You should at least understand the many different coverages that are available. Once you educate yourself on what these coverages are, you can determine what chance you think that you will incur any of these claims.

Some of the more popular coverage options for bars and nightclubs are:

General Liability Insurance:

Insurance for bodily injury or property damage on your premises.

Liquor Liability Insurance:

Provides liability coverage for bodily injury or property damage by intoxicated patrons of your establishment. General liability insurance will not cover you for losses pertaining to intoxicated guests.

Bouncer Liability Insurance:

Covers physical harm by employed bouncers to your patrons. Also covers injury to your employed bouncers.

Assault and Battery Liability Insurance:

Provides liability if fights occur while on the premises and patrons are injured. This coverage must be in place if you want coverage for these types of losses as a general liability policy will exclude these losses as well.

Workers Compensation Insurance:

Covers injuries to your employees while on the job. Working in a fast paced environment with food and beverages can greatly increase the likelihood of an injury to your employees.

Cyber Security:

Insurance coverage on things like the misuse of data or illegally obtained client data. Don’t expose yourself to a claim scenario like your clients credit data being illegally obtained and used.

These are just some of the coverage options that you could choose from. Understand that, as is the case in many commercial policies, there are many endorsements that can be added to your policy that can cover losses like employee dishonesty, damage to outdoor signs or windows, employee discrimination complaints, and many, many others.

Rates can vary greatly depending on several factors.

Some of these factors include:

Hours of operation

Types of entertainment

Capacity of patrons

Location of your establishment

Annual sales

Annual payroll

Types of coverage chosen

Years experience or years in business

Loss history.

Every establishment is different and you want to make sure that you discuss your needs with an agent that specializes in these forms of coverages and policy types to make sure that you minimize your losses. Whether you have a quiet lounge or a tavern with a mechanical bull, bad things can happen that can put you out of business unless you are properly insured.

Call and talk with an agent today to see what coverages would be recommended for your establishment. Our agents can be reached at 704-494-9495.

Workers Compensation Ghost Policies

If you are a contractor that does not have any employees and you have a contract that requires you to have a workers compensation policy, then you have likely heard of a ghost policy. What does this term mean though? A ghost policy is an industry term that typically refers to a workers compensation policy that is issued in the residual market through the North Carolina Rate Bureau. The term ghost policy is used as a reference to a workers compensation policy that has no employees. With an increasing number of contractors requiring their independent subcontractors to have a worker compensation policy, there needed to be a policy that these subs could get even if they didn’t have employees themselves. These policies were created to give these independent subs a way to get the needed certificate of insurance.

Why do contractors need you to have a workers compensation policy if you have no employees?

The reason you are being asked to have this policy is because it transfers the liability to you if you are hurt while you are on a job. If you have your own workers compensation policy in place, then it would be your policy to pay out if you are hurt. The main reason you are being asked to have this policy though is because it keeps the general contractor’s workers comp rate down. If they pay you as a 1099 independent sub contractor then your pay from them will not figured into their audited workers comp premium.

What is vital to know with ghost policies?

  1. Do your audit. When asked for information from your workers compensation company it is very important that you respond in a timely manner. The insurance company can increase your rate, withhold a refund, or mark you as non-compliant which hinders your ability to get a policy in the future.

  2. Make sure to 1099 any subcontractors under you AND make sure you get a certificate of insurance for them in order to keep your overall workers compensation rate down. If you have W-2 employees then their pay will count towards your workers comp premium. If you don’t get a certificate of insurance for your independent 1099 subs then their pay will also count towards your workers compensation premiums.

  3. The workers compensation policy will not cover you and your injuries as the owner if you don’t elect coverage for yourself. In an effort to keep the rate down, most owners exclude coverage for themselves. You must remember this if you are ever hurt though as there will be no coverage at all for your injuries if you reject coverage for yourself.

  4. The NC Rate Bureau will assign your policy to a specific company. If you have had a policy in the past then it will likely be the same carrier since they have your policy history.

  5. Workers comp policies are always estimated premiums. We never know what our true payroll will be unless we have 0 employees. It is for this reason that your policy premium is estimated. The true cost of the premium will be settled after the audit.

Why are workers compensation policies so expensive?

These premiums can be expensive depending on what your class code is. Typically exposures such as office work are very inexpensive because the risk value is so low. This is not true for classifications such as carpentry and roofing risks. The reason for the hefty premiums is due to the risk level and the fact that it will not only payout for their medical bills if they are injured, but also to their loss of time at work. When there is a claim, these total payouts can be very significant.

What kind of items are needed for an audit?

Below are a list of some of the more common items that are requested when you are completing a workers compensation audit. It is important that you keep accurate records leading up to the audit.

  • 941 payroll reports

  • Schedule C of your income tax return for the business

  • Ledgers and journals for the business

  • Business check books

  • List of independent 1099 subcontractors

  • Bank statements

North Carolina Rate Bureau residual policies, known as ghost polices, can be a very important part of your business requirements in getting work from other contractors. It is important that you take them seriously and that you arm yourself with all of the information needed to ensure that you don’t see extremely high rates. You also want to protect yourself as an employer from very expensive lawsuits. You should have a lengthy discussion with your agent to see if this policy type is something that will be beneficial to you.

Commercial Auto Insurance Coverage Requirements

If you are looking for a commercial auto quote, one of the first items that will need to be determined is the limit of liability that you will need to have.

In certain businesses in NC, you are required to have commercial auto coverage and on those policies, there are certain minimum limits of liability that are required. To register a personal auto, you are required to have certain limits of liability on your insurance policy. These limits are $30,000 bodily injury each person, $60,000 bodily injury each accident, and $25,000 property damage each accident. This is commonly referred to as 30/60/25.

These minimum limits are quite low and it doesn’t take a large accident to go over these minimum limit requirements. I strongly urge insureds to choose higher limits than the minimum required. Every carrier offers higher limits and the change in premium is relatively low compared to the coverages offered. Just remember, where your limits of liability stop, you are responsible for the remainder. You can, and in most cases, will be sued by the other party if your limits are not sufficient to the actual damage done.

The NC Reinsurance Facility (NCRF) has other minimum requirements for certain businesses. NCRF

Taxi Cabs: Cabs carry the same minimum 30/60/25 requirements as do personal autos.

Uber: Uber drivers are currently under the same restrictions as the cab companies with 30/60/25 requirements. Uber, as a corporation, provides a $1,000,000 limit of liability for their drivers while passengers are being transported.

Other Livery: Livery means simply, the transportation of passengers. The NCRF requirement for livery businesses with vehicles that can transport 15 or more passengers have a combined single limit (CSL) of $750,000.

Charter and Sightseeng Buses: The NCRF limit for buses is $1,500,000 due to the weight of the vehicle.

Limousines and Airport Shuttles: Passenger capacities up to 15 persons will require a $1,500,000 limit of liability for limousines and airport shuttles. This limit is increased to $5,000,000 if the passenger capacity is over 15.

Weighted Vehicles: Vehicles over certain weights that are not used to transport passengers have the following minimum required coverages: The gross vehicle weight of the vehicle and trailer combined has a minimum requirement of $750,000 if said weight is over 26,000 pounds.

The Federal Motor Carrier Safety Administration (FMCSA) has their own requirements for certain vehicles. Federal guidelines take over on certain risks. If vehicles cross state lines, then they are held to certain minimum standards.  FMCSA

 

Tractor Trailers: Unless transporting hazardous material, the minimum requirements for tractor trailers crossing state lines is $750,000.

Depending on your business and the vehicle you are driving, you will be required to have certain limits of liability either by NCRF guidelines or FMCSA guidelines. Your agent should know what limit are required if you are able to give the details of the vehicle, business type, gross vehicle weight, and radius you are driving. Keep in mind that higher limits are often available and you may want higher limits than the minimum requirements to protect you.

CERTIFICATE OF INSURANCE (COI)

What is a certificate of insurance?
A certificate of insurance is a document completed by an insurance company or insurance agency that lists insurance policy information including company name, policy number, coverage info, and term dates for an insured’s policy or policies.  It is commonly used for commercial policies to show proof of coverage.
Certificate Holder
The certificate holder is shown in the bottom left hand corner of the insurance certificate and reflects the name of the organization or individual that is requesting proof of insurance for the insured.  The certificate holder info requires the holder name and address to be listed.
Additional Insured
An additional insured is the certificate holder that also requests to be listed on the policy as an additional insured and further requests to be notified by the insurance carrier if the policy is to be canceled.  An additional insured has additional rights on the policy that a certificate holder does not have.  There can be an additional fee to list additional insureds on your policy with many carriers.  A box can be checked on each policy to signify that the certificate holder is listed as additional insured.
Sample Certificate
 
A sample certificate is a document that a contractor will send over that shows minimum requirements that a subcontractor must have in order to secure a contract.  The most common policy types, in order, that a contractor will require are general liability, workers compensation or employers liability, automobile liability, cargo liability (for truckers), and umbrella or excess liability.
What are the standard insurance policy types shown on a certificate of insurance?
A standard Acord certificate of insurance has space for some of the most common types of commercial insurance policies.  These common types are shown below in order of how they are listed on the insurance certificate from top to bottom.
General Liability
Automobile Liability
Umbrella or Excess Liability
Workers Compensation or Employers’ Liability
Blank Space/Other
Description of Operations Section
 
This section of the insurance certificate will list other pertinent information of the coverage being listed.  This section can make reference to an additional insured being listed on a specific policy, provide vehicle info on a scheduled auto policy, list information for other policy types, include other endorsements listed on the policy, etc.
Other Common Endorsements 
Some other common endorsement types that can be listed on commercial policies and indicated on certificates of insurance are shown below.
Additional Insured
Waiver of Subrogation
Primary and Non-contributory wording
Any Auto 
Hired Auto
Non-owned Auto
Aggregate Limits Apply Per Project
Aggregate Limits Apply Per Location
Certificates of insurance are a very common request in securing a contract for your business.  These contracts require certain minimum limits of liability from subcontractors and typically proof must be provided before you can begin work for that company.  You should pass that information along to your insurance agent before beginning any work to ensure that the cost of purchasing such policies do not outweigh what you are receiving for doing the work.  The cost of purchasing these policies and endorsements should be considered when you agree to perform a certain service.  A sample certificate of insurance or a list of insurance requirements can be requested up front from the contractor.
If you have any questions as to anything discussed please feel free to give us a call at 704-494-9495.

Non Emergency Medical Transportation Insurance

Non emergency medical transportation is classified as the transportation of any individuals where an emergency situation  does not apply.  The service is usually different from that of a taxi service due to the fact that there is more passenger assistance offered.  The vehicles typically have the ability to accommodate wheel chairs.  Passengers are typically physically handicapped or elderly.  It is safe to say that if you have flashing lights and/or a siren than you are not classified as non emergency medical transportation.  You would be considered emergency transportation at that time.

If the above describes your business than please read on for information on adequately insuring your business.

What types of insurance do I need?.

Commercial Auto Liability

This policy will cover you if you hit anyone or anything.  It is very important that you make sure that your vehicle is not on a personal auto policy or your losses incurred can be excluded.  A commercial auto policy will be required for losses that occur while you are using the vehicle for business use.  Auto liability will cover bodily injury and/or property damages.  It is also highly suggested that you carry medical payments on this policy at the maximum allowable amount by the auto insurance carrier.  That way small accidents will cover any small injuries that your passengers may occur.

Physical Damage Coverage

This is simply the comprehensive and collision damage to your car if you are at fault in an accident.  Again, you will want to make sure your policy is a commercial auto policy or coverage can be denied if you are using the vehicle for commercial use.  You may want to inquire into coverage for any permanently attached equipment to your vehicle as well such as wheel chair ramps.   In the event of a loss you want to make sure this equipment would be covered as well.

General Liability Insurance

General liability will cover any incidents that you are liable for outside of hitting other vehicles.  If your passengers incur major injuries and you are sued, you will want to make sure you are protected.  A general liability policy will cover these types of losses.   These policies typically start at $1,000,000 per occurrence although higher limits are available.

Other Policies

Other policies that may be important for you can include workers compensation, professional liability, and excess or umbrella liability.  We discuss each of these coverage in other articles.  Please review those articles for a more detailed description of these coverage types.

 

You may have a contract that requires you to have certain minimum coverages.  Typically you will receive what they call a sample certificate of insurance or insurance requirements documentation.  You should forward that information to your insurance agent for review so they can help you get the coverages that you will need.

The State of NC will also have minimum requirements that will depend on the number of passengers you can transport, whether you are crossing state lines, and the gross vehicle weight of the vehicle.  Keep in mind that the state minimum limits may be less that what you may feel is feasible to protect yourself.  You should get quotes on different limits to see if the additional premium is worth your being better protected.

If you have any questions on non emergency medical transportation insurance or if you would like a quote, please feel free to contact us at 704-494-9495.