Non-trucking liability insurance

Your lease decides who insures what

When a carrier with operating authority runs your truck under its authority, federal leasing rules (49 CFR Part 376) require a written lease. For as long as the lease runs, the carrier must have “exclusive possession, control, and use” of the truck and “complete responsibility” for operating it. On insurance, the lease must:

• state the carrier’s legal obligation to keep insurance for the protection of the public;
• say who provides any other insurance for the leased truck, “such as bobtail insurance”;
• list the amount of any insurance the carrier charges back to you.

If you buy coverage from or through the carrier, the lease must also promise you a copy of each policy on request and a certificate showing the insurer, policy number, dates, coverage, your cost and your deductibles (49 CFR 376.12(j)).

What non-trucking liability is for

The carrier’s policy is built around the carrier’s business. Non-trucking liability (NTL) is liability coverage for the times your truck is being used outside that business. The federal rule mentions bobtail insurance only as an example and leaves the details to your lease and your policy — and insurers word these policies differently. Before you buy, ask the agent to show you in the policy how it treats:

• driving to pick up a load, and coming home after a delivery;
• time between loads, and personal errands in the truck;
• driving with a trailer attached — loaded or empty — and without one;
• trips when the carrier has not dispatched you.

Then compare the answers with what your lease says the carrier covers.

When the lease starts and ends — on paper

The federal rules tie the lease to documents you can point to. The lease must state the time and date — or the circumstances — on which it begins and ends, and those times match the receipts exchanged when the carrier takes possession of the truck and, if the lease requires one, when you take it back (49 CFR 376.12(b), 376.11(b)).

During the lease the carrier identifies the truck as being in its service, and the lease must say who removes those identification devices when it ends (49 CFR 376.11(c), 376.12(e)). The carrier also keeps documents for each trip in its service — owner, origin, departure date and time, destination (49 CFR 376.11(d)). Keep your own copies of the lease and the receipts: together with the trip documents, they are the paper trail of when the truck was working for the carrier.

Other coverage a leased owner-operator may need

• Physical damage — collision and comprehensive for your own tractor. A lender with a lien on the truck will require it.
• Occupational accident — injury coverage for you as the driver.
• Know your deductions. The lease must state when the carrier may deduct cargo or property damage from your settlements, and you get a written, itemized explanation before any deduction (49 CFR 376.12(j)(3)).

Leaving the lease to run under your own MC? Then you are the motor carrier, and the federal minimum applies to you directly — $750,000 for general freight in trucks rated 10,001 lbs GVWR or more, filed by your insurer on BMC-91 or BMC-91X, with the MCS-90 endorsement on the policy. See the new authority guide and the owner-operator guide.

What to have ready for an NTL quote

• Your lease — the insurance clause, the start and end terms and any charge-backs.
• The name and USDOT number of the carrier you are leased to.
• Tractor VIN, year, make and model — and its value, if you also want physical damage.
• Your CDL details, years of experience and loss runs from recent insurers.
• Where the truck is parked and how it is used when you are not under dispatch.