Dakota Coffman (00:00)
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where truckers aren't just truckers, but explorers of the vast untamed highways. So strap in and buckle up because you're about to get squashed. Hey guys, welcome back to episode 12 of the Squatchers Trucking Podcast. I'm your host, Dakota Kaufman. And we get this question quite a bit about bobtail insurance and about non -trucking liability insurance. And so today's episode, we're just going to talk about the difference between the two, what they are, what they cover, what they don't cover.

when you need it and when you don't need it. So let's talk about Bobtail Insurance first. Bobtail Insurance is, it's liability coverage, auto liability, and it's for drivers operating under somebody else's trucking authority. So if you're operating under somebody else's DOT authority, that's what Bobtail Insurance is for. It's when you're not, you don't have a trailer attached or you're not dispatched on a load. And so when you are dispatched on a load or you're hauling a load under that DOT number,

Bobtail coverage isn't going to be in effect. Their auto liability is what's going to cover you and their cargo insurance. But when you aren't dispatched, you're not hauling a load for them. Then at that point, that's when the Bobtail would kick in. So let's just say you just dropped off a load and when you leave that trailer and you go off of dispatch, at that point, Bobtail coverage would kick in. So that's what Bobtail coverage. And so yeah, you drop trailer off, you drop a load off, boom.

Bobtail insurance kicks in. And most of the time, Bobtail insurance will include physical damage for your truck as well. But at minimum, it's gonna be auto liability for when you're not dispatched on a load. And so Bobtail coverage covers the same things that auto liability does. It's just when you aren't dispatched on a load or you're not hauling a load for somebody else's authority. But it's gonna have the same coverage for medical payments, for damage to property or somebody else's vehicle, stuff like that.

Bobtail coverage will include that. And then if you have physical damage on your truck, it's also gonna cover theft and hail damage or storm or fire, stuff like that. When do you need Bobtail insurance? Most of the time, if you're operating under somebody else's authority, that carrier is gonna tell you, hey, you need to get Bobtail insurance. Or if you drive your truck a lot where you're not dispatched on the load and you're deadheading somewhere, you need it then for sure. And then,

A lot of times non -trucking liability and Bobtail insurance, those two terms are used almost synonymously a lot, but they shouldn't be because they're not the same coverage. These two insurance coverages are pretty different. And so let's talk about what coverage for sure that you need for your company. If you're thinking about getting non -trucking liability or Bobtail, let's talk about that and find out for sure about which coverages you need. Okay, so non -trucking liability.

It also protects when you're not dispatched on a load or you're not hauling a trailer or anything like that. But it will not provide coverage if you're doing anything under dispatch that could fall under their authority, like when you're operating under their authority. However, if you get in an accident while you're running errands or something like that, non -trucking liability insurance, that policy would cover the costs and for the auto liability and stuff. So if you're a hot shot, this is a good example.

let's say you're a one ton or three quarter ton hot shot and you're not hauling a load on a commercial basis, even if you have your own operating authority, you still need to get a non -trucking liability policy for when you're not doing something commercial. And so, all right, let's recap that. If you're like a hot shot for this example, a one ton, three quarter ton, something like that, when you're not dispatched on a load, even if you have your own authority, you need to get non -trucking liability for when you're not hauling a load.

Bobtail insurance covers you when you don't have a trailer attached. And that's why it's called Bobtail, right? You're deadheading, you're Bobtailing. And so this would be like, you're driving under somebody else's authority, but you don't have a trailer hooked to it. And that could be like on your way to the next dispatch, right? And so Bobtail is gonna be more for like short -term in between two loads. Non -trucking liability is a little more permanent, if that makes sense.

So non -trucking insurance is liability only. And that's an effect when truckers are not under dispatch with a loaded trailer, like we already talked about. In most cases, liability policies are going to pay expenses if you're involved or responsible or at fault in an accident. So an example, let's give another example here. You've completed a haul. You're no longer under dispatch. And instead of driving straight home, now at this point, you use your truck to pick up some groceries, right? Your rig slides on some ice and...

In an effort to stop, you knock over a stop sign. Non -trucking liability would cover the property damage in that regard. In the event where another driver is involved, non -trucking liability would cover the damage to the other person's property, such as like their vehicle, medical bills, legal fees, and even settlements if it comes to that, right? But a non -trucking liability doesn't cover physical damage for your truck. That's a separate part of that policy.

And so that protection would fall under your physical damage coverage, but everything that needs to be paid out to somebody else, like you're at fault in an accident, medical payments, legal fees, all that stuff is gonna fall under non -trucking liability. But the physical damage portion is a separate thing, right? And those can even be two separate policies. And so that's just something to know when you're shopping or if you need non -trucking liability, it's probably by itself doesn't include physical damage. You're gonna need to request that. And this is another question we get a lot.

Do owner operators need non -trucking liability coverage? So this is somebody that has their own authority. They operate under their own DOT number. They have their own MC number. They operate for their company. Nobody else's, they're not under dispatch of anybody else's authority. And so we get this question a lot. Do I need non -trucking liability? So let's just go over some examples of why you might need non -trucking liability. If you drive your truck to run errands or other non -business purposes.

to cover the cost of physical damage if an accident occurs. And again, that's a separate thing that you'll need to add to that, but it's gonna be if you're just running errands or you're not on business or commercial stuff. And this is to cover medical expenses, to help cover costs of a lawsuit. And then another one is obviously your motor carrier requires you to obtain non -trucking liability insurance, but that doesn't really apply if you're operating under your own authority. So if you're operating under your own authority, again,

the hot shot example, right? Like let's say you got done with a load and you're going stopping by the grocery store or you have to stop at a place to get something, but you're not on a load or you're not doing anything commercial. Your commercial policy, your auto liability commercial policy that you have for your own authority could decline a claim if you're not actually hauling a load. And so if you're using your truck for personal stuff, get a non -trucking liability policy as well. For example, we had somebody,

that didn't have a, it was a hot shot, didn't have a non -trucking liability policy. And he had a personal policy and you know, it wasn't, you know, anything to do with us in that regard, but they didn't have the right coverage that they needed and their truck caught on fire while they were hauling a load. And so their personal policy didn't cover it. And so if you're number one, if you are hauling stuff, you need a commercial policy. Number two,

If you're doing personal stuff outside of your commercial stuff with your same vehicle, you need to get non -trucking liability, right? And so, or you have your personal policy, right? But non -trucking liability would be for like for semis, stuff like that, hot shots, where maybe in between loads, you're gonna be doing something. And so that's just that liability portion for when you're not hauling a load is the simplest way to put it. But to simplify a little bit here,

a semi -driver's commercial policy, the truck insurance policy, is going to cover you from dispatch point until your haul has been completed. So until that load's completed, your truck insurance is covering that, right? But typically, non -trucking liability insurance, that fills the gap in coverage for when your truck isn't being used for a revenue generating purpose, in simple terms. That's the most basic, that is in essence what non -trucking liability is. In almost all cases though,

motor carriers are going to require you to get non -trucking liability. And you know, whether it's a owner operator contract or whatever, and in some areas that you have to have it by law, they're required to offer the coverage to you. So if you're the owner operator driving under your own authority, non -trucking liability may be covered under your primary commercial vehicle insurance. So if you're operating under your own authority, your policy that you have now may cover non -trucking liability. That's something that you need to check.

when you're getting quotes or whatever, or look at your existing policy and look at it and say, does it cover or ask your agent or carrier, whoever, if it covers non -trucking liability. Okay, so just to wrap up this episode here, let's talk about cost. How much does non -trucking liability cost and Bobtail coverage cost? And so it's gonna depend on a myriad of factors, right? It's gonna depend on what you're hauling, the equipment that you're using, how expensive the equipment is that you're using.

operating radius, your lease agreement, all of those things are going to be factored into it. The biggest things that are going to impact a Bobto policy. Now we've seen just a liability portion of a non -trucking liability policy be as cheap as $500 a year. So non -trucking liability is super, super cheap. Now, if you add physical damage onto it, it adds a little bit to it. Usually you could say about six to 7 % on

the cost of the physical damage. So 40 ,000, $50 ,000, six to 7 % of that, right? And that's usually how physical damage is calculated is on like a percentage basis. And so you can get a rough estimate, you know, of what it would run. That's if you have a clean driving record, no accidents, stuff like that. And that's a huge generalization because everybody's going to be a little bit different, but non -trucking liability by itself, just the liability portion is super cheap. Additional costs come in when you add physical damage. All right guys, so just to recap,

you need non -trucking liability for when you're not dispatched on a load. That's the simplest way. A lot of times your motor carrier, if you're an owner operator and you don't have your own authority, you're operating under their authority, they're gonna make you have non -trucking liability or require you to have it per your contract. That covers just if you're not dispatched on a load. In essence, that's all non -trucking liability is. But guys, we hope you enjoyed this episode. Tune in next week for another one. And we produce content every week, specifically just for trucking.

and we specialize in trucking insurance and we have a compliance company and a couple other things. We'd love to hear from you, love to get some feedback from you and love to help you out with any of those services that we have. I'll link everything in the description below. Thanks for tuning in guys, we appreciate you. We'll see you on the next one.