Understanding Non-Trucking Liability Insurance: Essential Coverage for Truckers

Aug 10, 2023 in Insurance 101

In the world of trucking, where the open road holds both opportunities and risks, the importance of comprehensive insurance coverage cannot be understated. One type of insurance that plays a crucial role in protecting owner-operators and drivers is Non-Trucking Liability (NTL) insurance. Non- trucking liability insurance is commonly and incorrectly referred to as "bobtail insurance". Let's delve into what NTL insurance is, why it's needed, and how to choose the right coverage.

What is Non-Trucking Liability Insurance?

Non-Trucking Liability insurance, commonly referred to as NTL insurance, is designed to provide coverage for owner-operators and drivers who operate under a permanent lease to an authorized motor carrier but are driving their vehicles for non-business, personal use. This insurance serves as an additional layer of protection to bridge the gaps that may not be covered by the motor carrier's primary auto insurance.

Is Non-Trucking Liability Insurance "bobtail insurance"?

While non-trucking liability insurance is commonly referred to among truckers as "bobtail insurance" because it may apply when the semi- truck is "bobtailing" i.e. driven without the trailer. This is common misconceprion as the notion of bobtailing is too broad to be incorporated as policy language. Most insurance companies prefer the term "Non-trucking Liability Insurance" because it more precisely describes the purpose of the policy - to provide coverage when the truck is not driven for the "benefit of the motor carrier".

The Increasing Need for NTL Insurance

With the rising number of trucking accidents and escalating judgments associated with them, having comprehensive insurance coverage has become more critical than ever. Statistics show a startling increase in fatal accidents involving trucks, with over 5,000 trucks involved in fatal accidents in 2019 alone, marking a 43% increase from 2010. Moreover, the average judgments with verdicts exceeding $1 million surged nearly 1,000% from $2.3 million to $22.3 million between 2010 and 2018.

These substantial verdicts, often referred to as "nuclear verdicts," have made insurance companies more cautious in their coverage decisions. For instance, primary auto insurers may scrutinize claims to determine whether the driver was truly in the service of the trucking company during the accident. If there's uncertainty about whether the truck was being used for personal activities, the claim might be denied to mitigate the insurer's risk. NTL insurance offers an additional layer of protection in such scenarios, safeguarding against accidents that aren't covered by the motor carrier's primary auto insurance.

Why NTL Insurance Matters

While accidents occurring during non-business hours might be less frequent, the consequences can be just as severe. A single accident can result in a monumental verdict that could potentially bankrupt a trucking company or an owner-operator. NTL insurance acts as a safety net, ensuring that even under such circumstances, financial ruin is avoided.

Securing the Right NTL Insurance

When it comes to NTL insurance, choosing the right policy involves more than just considering the premium costs. While affordability is important, the insurer's claims process is equally significant. Many large insurers outsource claims processing to third-party administrators, potentially resulting in claims adjusters who lack a deep understanding of the trucking industry. This can lead to challenges in determining the rightful compensation.

To ensure efficient claims handling and accurate assessment, it's wise to collaborate with an insurer that possesses an in-house claims team with extensive experience in the trucking sector. These professionals are better equipped to navigate the complexities of trucking accidents and promptly resolve claims, ultimately minimizing downtime and financial strain.

In Conclusion

Non-Trucking Liability insurance plays an indispensable role in safeguarding the livelihood of owner-operators and drivers who operate under permanent leases. In an industry fraught with risks, having the right insurance coverage can mean the difference between recovery and financial catastrophe. As the trucking landscape continues to evolve, understanding the nuances of NTL insurance and partnering with an insurer that prioritizes industry expertise can provide peace of mind and security in the face of the unknown.