Everything you need to know about transportation insurance
Truckers, your work is essential to our economy. Whether you’re a long-haul or short-haul trucker, the most important thing is reaching your destination safely. Find out more about transportation insurance with these tips from our risk management specialists.
What you should know before getting started
Do you have some experience under your belt and want to get into the trucking industry using your own truck? Great news! However, there are a few things to consider before getting started:
- You will need to provide a copy of your driving record from the Société de l’assurance automobile du Québec (SAAQ), and any demerit points you’ve accumulated will be taken into consideration.
- A letter from your former employer describing your experience is recommended (and may even be required).
- The value of your future truck and the intended type of transportation may be more expensive than you bargained for. Since certain types of transportation are not insurable under your primary insurance, you may need to reconsider your options.
- Find out about your lender/lessor’s insurance requirements. They may require civil liability coverage of $10,000,000.
- Find out about your future work provider’s insurance requirements. They may require you to take out a minimum amount of civil liability coverage, cargo insurance and a certain amount of coverage for damage to vehicles you don’t own (QEF27), especially if you use their trucks and/or trailers.
Things to consider when it comes to distance
1. Short-haul and medium-haul trucking
One of the reasons why insurance premiums are less astronomical when a carrier only operates in Quebec is because of the “no fault” principle. This means that anyone injured in a car accident is automatically covered by Quebec’s public automobile insurance plan.
Under this plan, victims are compensated by a public agency, the Société de l’assurance automobile du Québec (SAAQ), rather than by a private insurer. Companies and individuals are therefore unable to take legal action against the person responsible for the accident. This type of transportation is often the easiest to insure for a new business.
2. Long-haul and interprovincial trucking
Truckers heading south of the border or through the province of Ontario are generally hardest hit by the insurance premium increases in recent years. It’s important to choose the right driver for this type of route – in other words, it’s always best to give these routes to the most experienced drivers. Consider strategically giving out-of-province and American contracts to drivers with the cleanest driving records and the most experience. As you know, a driver’s driving record and the letter describing their experience both have a significant impact on the insurer’s rating.
Additionally, their civil liability limit should not be less than $5 million, given the astronomical damages sought by third parties in road accidents.
Transporting dangerous goods
This type of transportation exposes you to yet another risk in addition to the usual risks associated with trucking. For this reason, it’s useful to be aware of environmental risks. Taking out an environmental insurance policy is strongly recommended for this type of transportation, since your insurance policy may contain exclusions depending on the type of accident. For example, in some situations, the government may hold you liable for the cost of soil or water decontamination. That’s why contractors who transport dangerous goods should make sure to take out environmental coverage, since they could find themselves facing a hefty bill (up to hundreds of thousands of dollars!).
Four handy tricks to reduce your risk and potentially lower your insurance premium
1. Get in the habit of conducting regular mechanical inspections
For most truckers, inspecting your trucks is already one of your duties and a part of your routine. Making sure that your truck is in good condition reduces the risk of a breakdown and sometimes even material damage, such as the loss of a wheel that could result in a ground collision.
2. Stop in safe locations
Whether you’re stopping for the night or for the weekend, bear in mind that cargo theft and vandalism are a common cause of insurance claims. Make a habit of choosing well-lit locations with surveillance cameras when you stop for the night. For longer stopovers, opt for fenced areas to prevent your cargo from being stolen or vandalized.
3. Be open to dealing with minor damage yourself
If the deductible for your fleet is not already $15,000 to $20,000, we recommend creating a contingency fund for minor breakdowns and property damage. While you’re entitled to file a claim for a small loss, history has shown that claims frequency is significant on a number of fronts and could negatively affect your business and put your overall operations at risk.
4. Install a dash cam
Depending on the routes you drive, a dash cam may be required by your insurance provider. It’s a handy thing for all truckers to have, since it provides evidence in the event of an accident.
Our brokers are always available to help you assess the inherent risks to your business. Whether you operate in Canada or the United States, we can help you build and maintain a solid insurance file to help you stand out to insurers. Contact us now.