Insurance Needs: Owner-Operators vs. Company Drivers in U.S. Trucking

Understanding the insurance requirements in the trucking industry is crucial, as owner-operators and company drivers face different obligations and risks. Below we compare all major types of insurance relevant to each group, explaining who needs what coverage, who pays for it, typical policy details, whether it’s optional or mandatory, cost insights, and key differences in risk exposure.

Overview: Owner-Operators vs. Company Drivers

Owner-operators are independent business owners who supply and maintain their own trucks, handle their own operating expenses (including insurance), and are not traditional employees (Owner/Operator vs Company Driver: What’s the difference? – Sunburst Truck Lines). Company drivers, by contrast, are employees driving fleet-owned trucks; their employer covers most operational costs and provides standard benefits like health insurance (Owner/Operator vs Company Driver: What’s the difference? – Sunburst Truck Lines). In short, owner-operators bear the responsibility of securing and maintaining various insurance policies for their equipment and operations, while company drivers rely on their employer’s insurance coverage for the trucks they drive and work-related liabilities. This fundamental difference underpins the contrasts in insurance needs and risk exposure between the two groups.

Below, we detail each major insurance type and how its requirements and responsibilities differ for owner-operators versus company drivers.

Commercial Vehicle Insurance (Trucking Auto Policy)

Definition & Coverage: “Commercial vehicle insurance” refers to a commercial auto insurance policy designed for trucks used in business (as opposed to personal auto insurance, which excludes commercial use). A commercial trucking policy typically includes liability coverage for accidents, and can include additional coverages like collision and comprehensive (physical damage) and uninsured motorist protection.

• Owner-Operators: Every truck operated for business must be insured under a commercial policy. Owner-operators running under their own authority (i.e. operating as an independent motor carrier) must purchase a commercial truck insurance policy in their name (Frequently Asked Questions | Coverage, Liability, & More | OOIDA). This policy must meet Federal Motor Carrier Safety Administration (FMCSA) requirements for liability coverage (details in the next section) and any state mandates. It usually includes primary liability coverage and can be tailored with other coverages (physical damage, cargo, etc.) to protect the owner-operator’s investment. If an owner-operator is leased to a motor carrier (operating under a carrier’s authority), the motor carrier’s insurance will typically cover primary liability for the truck while under dispatch (How much is semi-truck insurance? Average costs and more). In that case, the owner-operator is usually responsible only for secondary or supplemental coverages (such as bobtail liability when off duty, and physical damage for their own truck) (How much is semi-truck insurance? Average costs and more). In either scenario, owner-operators must ensure they are not using a personal auto policy, as those will not cover commercial trucking risks.
• Company Drivers: Company drivers do not need to purchase their own trucking insurance policy for the vehicles they drive. The employing motor carrier provides a commercial auto insurance policy covering all company-owned trucks and drivers (Owner/Operator vs Company Driver: What’s the difference? – Sunburst Truck Lines). The employer’s policy includes the legally required liability coverage and usually covers physical damage to the fleet’s trucks, cargo, etc., as needed. Company drivers are covered under their employer’s insurance when operating company vehicles, so they are not held personally responsible for insuring the truck. (If a company driver ever uses a personal vehicle for work errands, the employer might need “hired/non-owned auto” coverage, but in general company drivers in heavy trucking exclusively use insured company trucks.)

Mandatory or Optional: Commercial auto insurance is effectively mandatory for any truck operating in commerce. Federal law requires proof of financial responsibility (liability insurance) for trucking authority, so no owner-operator or carrier can legally operate without it (Frequently Asked Questions | Coverage, Liability, & More | OOIDA). Company drivers are indirectly mandated to be covered, since their employer must have insurance. In summary, every commercial truck on the road must be covered by a commercial policy, whether that policy is owned by an independent owner-operator or by a trucking company.

Typical Coverage Details: A commercial trucking insurance policy for an 18-wheeler often carries a combined single limit for liability (e.g. $1 million coverage per accident for injury or damage to others). It can include comprehensive and collision coverage for the truck, uninsured/underinsured motorist coverage, and possibly other add-ons. Policies are usually tailored to the operation’s needs – for instance, an owner-operator with one truck will have a policy covering that unit, whereas a large fleet has a blanket policy for many vehicles. Commercial policies are rated on factors like driving radius, commodities hauled, the driver’s record, and the truck’s value (How much is semi-truck insurance? Average costs and more) (How much is semi-truck insurance? Average costs and more).

Cost Insights: Insurance is a significant expense for owner-operators. An owner-operator with their own authority can expect to pay around $14,000–$22,000 per year (roughly $1,167–$1,833 per month) for a full trucking insurance package covering liability, cargo, and physical damage (How much is semi-truck insurance? Average costs and more). In contrast, an owner-operator leased onto a motor carrier (who only needs Bobtail, physical damage, and perhaps occupational accident coverage) might pay about $3,600–$5,000 per year ($300–$400 per month) (How much is semi-truck insurance? Average costs and more). These figures illustrate that carrying one’s own authority (and thus full insurance responsibility) can cost an owner-operator roughly 3–4 times more in insurance than leasing under a carrier’s policy (How much is semi-truck insurance? Average costs and more). Company drivers do not pay these costs out-of-pocket; however, for context, the motor carrier’s cost per truck might be similar to the owner-operator scenario. Large fleets often negotiate bulk rates, but industry-wide rising premiums (due to high accident litigation costs, etc.) affect carriers of all sizes. In any case, the company driver is shielded from direct insurance premiums.

Risk Exposure Differences: Owner-operators carry greater personal risk related to insurance. If they fail to maintain required coverage or carry insufficient limits, they could face catastrophic liability in an accident. They also must manage deductibles and claims on their policy; a major claim can drive up their future premiums or even threaten their business. Company drivers, on the other hand, have little personal financial risk in terms of vehicle insurance – the employer’s policy handles accident claims. If a company driver is at fault in a crash, the trucking company’s insurance (or self-insurance) pays for damages; the driver may face internal discipline or legal consequences for negligence, but they typically aren’t personally sued for huge sums (the doctrine of respondeat superior puts liability on the employer). In sum, owner-operators have the burden of securing and paying for commercial vehicle insurance to stay on the road, whereas company drivers simply need to operate within their employer’s insurance framework.

Liability Insurance (Primary Auto Liability)

Definition: In trucking, “liability insurance” usually refers to commercial auto liability coverage – the insurance that pays for bodily injury or property damage that a truck driver may cause to other people in an accident. This is the foundational coverage required by law for all commercial carriers, protecting the public from harm or damage caused by trucking operations (How much is semi-truck insurance? Average costs and more).

Required for Whom: This coverage is required for both owner-operators and company drivers, but the responsibility for carrying it differs:

• Owner-Operators: If operating under their own authority, an owner-operator must carry primary auto liability insurance in their name to meet federal and state financial responsibility laws. The FMCSA mandates a minimum of $750,000 in liability coverage for interstate for-hire carriers of non-hazardous property (Frequently Asked Questions | Coverage, Liability, & More | OOIDA). In practice, virtually all shippers and brokers require $1,000,000 in liability limits for trucking operations (Frequently Asked Questions | Coverage, Liability, & More | OOIDA). Owner-operators with their own authority thus typically purchase at least a $1 million liability policy (often a combined single limit covering both injury and property damage) to comply. If an owner-operator is leased to a motor carrier, the motor carrier provides the primary liability coverage under its policy (since the truck operates under the carrier’s DOT authority) (Frequently Asked Questions | Coverage, Liability, & More | OOIDA) (Frequently Asked Questions | Coverage, Liability, & More | OOIDA). In that case, the owner-operator does not need a separate primary liability policy; however, the carrier may charge the owner-operator a fee or percentage to cover the cost of insuring them (Frequently Asked Questions | Coverage, Liability, & More | OOIDA). It’s important for leased drivers to check their lease agreements to see if and how the carrier passes on insurance costs (Frequently Asked Questions | Coverage, Liability, & More | OOIDA). (By law, a carrier must maintain liability coverage for all trucks under its authority, so a leased owner-op cannot independently obtain “primary” liability for operations under someone else’s authority (Frequently Asked Questions | Coverage, Liability, & More | OOIDA).)
• Company Drivers: Company drivers do not purchase their own liability insurance. The trucking company (their employer) maintains a commercial auto liability policy that covers all company drivers and equipment. Legally, the motor carrier must have the required coverage in order to dispatch its drivers. The driver is covered by the company’s liability insurance whenever operating within the scope of their employment. In other words, the company’s policy will pay for any third-party injuries or damages if the company driver is at fault in an accident. Company drivers are usually listed or covered as permissive drivers on the policy; they are not individually insureds in the sense of buying a policy, but they benefit from the coverage. There is no legal requirement for an individual driver to carry personal liability insurance for a commercial truck – that responsibility lies with the carrier.

Coverage Details: Primary auto liability insurance covers claims by others who are injured or whose property is damaged in an accident caused by the insured truck. This includes coverage for bodily injury to other motorists or pedestrians and property damage (e.g. vehicle repair, guardrail damage) resulting from a crash. Typical trucking liability policies carry a $1 million per occurrence limit (some higher for certain freight or contracts). Higher limits can be obtained via umbrella policies if needed (for example, large companies or hazardous materials carriers may carry $2M, $5M or more in coverage due to higher risk). FMCSA’s base minimum of $750k is often insufficient in serious accidents, which is why $1M is the industry standard (Frequently Asked Questions | Coverage, Liability, & More | OOIDA). In case of extremely severe accidents (e.g. multi-fatality crashes), claims can exceed these limits; owner-operators would then have personal exposure for excess liability, whereas large companies might have excess insurance or assets to cover it.

It’s worth noting that uninsured/underinsured motorist (UM/UIM) coverage is often packaged with auto liability insurance (or at least offered alongside it). UM/UIM covers injuries to the truck driver (or damage to the truck) if they are hit by a third-party who has no insurance or not enough insurance. Many states require offering UM/UIM up to the liability limits. Owner-operators with their own policy often include UM/UIM for their protection (How much is semi-truck insurance? Average costs and more). Company fleets may also carry UM/UIM, though if a company driver is injured by an uninsured driver on the job, typically workers’ comp (discussed later) would cover their medical bills instead.

Mandatory vs. Optional: Primary liability insurance is mandatory by law for any operating authority in trucking. Interstate motor carriers must file proof of financial responsibility (Form MCS-90 endorsement) verifying they have at least the minimum required liability coverage (Frequently Asked Questions | Coverage, Liability, & More | OOIDA). There is no option to operate legally without it. Even intrastate operations have state insurance requirements that generally mirror the federal rules. For company drivers, there’s no separate mandate on the driver – the mandate is on the carrier – but effectively it’s mandatory that someone (the carrier) carry it to cover the driver. This is unlike personal auto, where an individual must insure their car; in trucking, the business must insure the vehicles and drivers.

Cost: Liability insurance is usually the single largest component of an owner-operator’s insurance bill. For an owner-operator with one truck under their own authority, annual premiums commonly range from $9,000 up to $15,000 just for the liability portion (How much is semi-truck insurance? Average costs and more). New ventures or higher-risk operations may pay at the upper end or more. (Factors like driving record, location, hauling distance, and freight type all influence the rate (How much is semi-truck insurance? Average costs and more).) On top of that base premium, owner-operators might add optional coverages. By comparison, a leased owner-operator (where the carrier provides the liability coverage) effectively avoids paying this $9k–$15k directly, though the carrier may recoup some costs via lease fees or lower per-mile payouts. Company drivers similarly do not pay liability premiums; the motor carrier absorbs those. Large trucking companies often negotiate fleet insurance rates, but industry trends (like “nuclear verdicts” in accident lawsuits) have driven costs up for everyone, with motor carriers’ liability premiums rising year over year. For context, one source notes that operating under a carrier can save an owner-operator 50–75% on insurance costs versus running under their own authority (How much is semi-truck insurance? Average costs and more) – largely due to the carrier covering expensive liability insurance.

Risk Differences: An owner-operator with their own authority assumes full legal liability for accidents. This means if they cause a serious crash, their insurance will pay out up to the limit, and the owner-op could be personally liable for any excess. For example, if an owner-operator only carries $750k and a fatal accident results in a $1.5 million judgment, the owner’s business (and potentially personal assets) are on the line for the remainder. Owner-operators must therefore carefully choose adequate liability limits and maintain their policies; a lapse in coverage could shutter their business immediately (operating without insurance can lead to license revocation and ruinous personal liability if an accident occurs). Company drivers operate under their employer’s liability coverage, so the employer bears the brunt of accident liability. The trucking company may be sued for damages; the driver usually will not pay out-of-pocket (the exception might be willful misconduct or if the company’s insurance tries to subrogate due to a driver’s gross negligence, but that’s rare). The company driver’s risk is more indirect: severe accidents can hurt the company’s insurability and the driver’s career (they could be fired or find it hard to get hired elsewhere with a bad record), but the driver isn’t writing checks to victims. In summary, liability insurance is a personal business responsibility for owner-operators, whereas for company drivers it’s a provided protection that allows them to operate without personal financial hazard in accidents.

Occupational Accident Insurance (Injury Coverage for Owner-Operators)

Definition: Occupational accident insurance (often abbreviated “Occ/Acc”) is a specialized policy that provides coverage for work-related injuries to independent contractors, such as owner-operator truckers. It can cover medical expenses, lost income (disability), and death or dismemberment benefits if the owner-operator is injured or killed in the course of doing their job (How much is semi-truck insurance? Average costs and more). This type of insurance is analogous to workers’ compensation, but it is not workers’ comp; it’s a private insurance plan with set benefit limits, used primarily by those who are not employees (and thus not covered by statutory workers’ comp) (Best Occupational Accident Insurance for Truckers in 2025) (Best Occupational Accident Insurance for Truckers in 2025).

Who Needs It:

• Owner-Operators: Generally, any owner-operator who is not covered by an employer’s workers’ compensation policy should strongly consider (or may be required to carry) occupational accident insurance. Independent owner-operators (whether running under their own authority or leased to a motor carrier) are typically exempt from workers’ comp laws since they are business owners, not employees (Best Occupational Accident Insurance for Truckers in 2025). Without some form of injury insurance, if the owner-op is hurt on the job – for example, in a crash or while loading cargo – they would have to pay their own medical bills and would have no wage replacement during recovery. Occ/Acc insurance fills this gap. Many motor carriers require their leased owner-operators to carry an occupational accident policy (or participate in a carrier-sponsored plan) as a condition of the lease (Best Occupational Accident Insurance for Truckers in 2025). This protects both the driver and the carrier: the driver gets coverage for injuries, and the carrier reduces the likelihood of an injured contractor suing or being deemed a de-facto employee. Some carriers purchase a group occupational accident policy on behalf of their independent contractors, while others mandate the contractors obtain it themselves (Best Occupational Accident Insurance for Truckers in 2025). Owner-operators with their own authority have no “boss” to answer to, but they still often buy occupational accident insurance for their own protection, especially if they have family or financial obligations that would suffer if they were severely injured. In summary, occupational accident insurance is typically carried by owner-operators (or other 1099 contract drivers) who do not have workers’ comp.
• Company Drivers: Company drivers do not need occupational accident insurance – they are covered under workers’ compensation (which is provided by their employer by law). Occ/Acc is designed for those not in the employer/employee framework. A company driver who is a W-2 employee would almost never purchase an occupational accident policy for themselves, and it would be redundant to do so. (An edge case might be a company driver in Texas – the one state where private employers aren’t universally required to carry workers’ comp – if their employer “opts out” of workers’ comp, the employer would generally provide an alternative injury benefit plan, possibly an Occ/Acc style plan, to fulfill their obligation (Best Occupational Accident Insurance for Truckers in 2025) (Best Occupational Accident Insurance for Truckers in 2025). But this is not common in trucking, as most companies carry workers’ comp even in Texas or states where opting out is allowed.) In short, if you are an employee driver, your work injuries are handled through workers’ comp, not a personal Occ/Acc policy.

Coverage Details: Occupational accident policies can be somewhat customizable. They typically include coverage up to a certain limit for medical expenses (for example, $1,000,000 limit for medical treatment from a trucking accident), a portion of lost wages (disability income) up to a weekly maximum for a set period if you’re unable to work, and a death benefit or survivor benefit if the worst happens. Some also include smaller benefits for things like accidental dismemberment or limited coverage for non-occupational accidents (OOIDA’s plans, for instance, include some coverage for accidents away from work as well) (Life & Health Benefits | Become an OOIDA Member Today). The policy will have a deductible (often relatively low, like a few hundred dollars for medical) and benefit maximums. For example, one common plan might offer $1 million medical, $2,000 per month disability for up to 2 years, $300,000 accidental death, etc. Unlike workers’ comp, these benefits are not open-ended or lifetime; they are capped by the policy terms.

Importantly, occupational accident insurance does not guarantee the same protections as workers’ compensation. If an owner-operator has a very severe injury, the Occ/Acc policy will pay only up to its limits. If costs exceed those limits, the owner-op could potentially bear expenses beyond that, or possibly pursue legal action. Also, Occ/Acc typically requires the insurer to accept that the injury was occupational; if there’s a dispute (e.g. if the injury might be from a pre-existing condition or occurred off the job), the claim could be denied – whereas workers’ comp is a no-fault system that generally covers any injury arising out of employment.

Mandatory vs. Optional: Legally, occupational accident insurance is optional. There is no federal or state law requiring independent contractors to carry it (Best Occupational Accident Insurance for Truckers in 2025). However, from a practical standpoint it is often effectively mandatory for leased owner-operators due to motor carrier requirements. Carriers have a strong incentive to ensure their 1099 drivers have some injury coverage (to avoid liability and moral responsibility if a contractor is hurt). Thus, a lease contract will usually stipulate the owner-operator must enroll in an occupational accident program or show proof of equivalent coverage (Best Occupational Accident Insurance for Truckers in 2025). For an owner-operator with their own authority (completely independent), no one will force them to buy Occ/Acc, but operating without it is a major risk. Many such owner-ops will still opt in for safety. By contrast, a company with employees cannot substitute Occ/Acc for workers’ comp in most states (workers’ comp is legally required if you have employees). A few states allow opting out of workers’ comp, but then the company must still provide some form of equivalent coverage to employees – often by using an occupational injury insurance plan with benefit levels similar to workers’ comp (Best Occupational Accident Insurance for Truckers in 2025). In summary, for owner-operators Occ/Acc is voluntary by law but common by industry practice, whereas for company drivers it’s not applicable (workers’ comp is the mandated coverage instead).

Cost: One advantage of occupational accident insurance is cost – it is usually significantly cheaper than workers’ compensation coverage. Typical occupational accident premiums for a truck owner-operator might range from around $50 to $200 per month per driver (Best Occupational Accident Insurance for Truckers in 2024) depending on coverage limits and the insurer. A common ballpark is around $130–$150 per month (roughly $1,600–$2,000 per year) for a $1 million limit plan (How much is semi-truck insurance? Average costs and more). OOIDA, for example, advertises a $1,000,000 Occ/Acc plan at about $144/month (Occupational Accident 1m – OOIDA). By comparison, a workers’ comp policy for a long-haul truck driver can cost a few thousand dollars per year (Schneider estimates $3,000–$5,000 annually per driver for workers’ comp) (How much is semi-truck insurance? Average costs and more). In percentage terms, Occ/Acc might be on the order of 30%–50% cheaper than equivalent workers’ comp premiums (Occupational Accident vs. Workers’ Compensation). For leased owner-ops, carriers often deduct the Occ/Acc premium from settlements (for instance, a carrier might charge a contractor $35–$50/week for an Occ/Acc plan). Company drivers don’t see these costs, as workers’ comp is paid entirely by the employer (and typically based on a percentage of payroll).

Risk Exposure Differences: For owner-operators, occupational accident insurance is a crucial risk mitigator, but it doesn’t eliminate all risk the way workers’ comp does for employees. If an owner-operator has Occ/Acc coverage and gets injured on the job, they have some financial protection – their medical bills and a portion of lost income should be covered up to the policy limits, which can prevent devastating personal losses. However, if injuries are extremely severe (exceeding policy limits), or if the insurer denies a claim due to a coverage technicality, the owner-op could be left in a tough spot. Additionally, because Occ/Acc is not governed by state workers’ comp law, an owner-operator retains the right to sue a contracting company for negligence in some cases – but conversely, the company could also face liability if the contractor proves the company was negligent. With workers’ comp, an employee generally cannot sue the employer (comp is the “exclusive remedy”), but with Occ/Acc, there is a potential for lawsuits, though having the insurance in place often dissuades it (Best Occupational Accident Insurance for Truckers in 2025) (Best Occupational Accident Insurance for Truckers in 2025). From the motor carrier’s perspective, a contractor with Occ/Acc is less likely to pursue litigation for injury because they are getting benefits, whereas one without it might try to sue claiming the carrier was essentially an employer.

Company drivers, on the other hand, benefit from the comprehensive safety net of workers’ compensation (discussed next). Their medical care and a portion of wages are covered by law if they get hurt at work, regardless of fault, and these benefits can be substantial and long-term for serious injuries. Thus, company drivers generally do not bear the risk of medical bankruptcy from a job injury – that risk is absorbed by the employer’s insurance. Owner-operators must plan for the risk of injury; failing to carry Occ/Acc (or some equivalent health/disability coverage) means they are effectively “self-insuring” their injury risk, which could be financially ruinous after a single incident.

In summary, occupational accident insurance is critical for owner-operators to have some protection similar to workers’ comp, and it is often contractually required for them, whereas company drivers rely on workers’ comp and do not use Occ/Acc. The two coverages serve a similar purpose (covering on-the-job injuries), but apply to different worker classifications and have different legal frameworks (Best Occupational Accident Insurance for Truckers in 2025) (Occ/Acc for independent contractors, not mandated by law; workers’ comp for employees, legally required, and generally more expensive but more comprehensive (Best Occupational Accident Insurance for Truckers in 2025)).

Workers’ Compensation Insurance (Employee Injury Coverage)

Definition: Workers’ compensation is a state-regulated insurance system that provides benefits to employees who suffer work-related injuries or illnesses. It covers 100% of necessary medical treatment, a portion of lost wages, and sometimes disability rehabilitation and survivor benefits, all as defined by state law. In trucking, company drivers (as employees) are protected by workers’ comp in the event of on-the-job injuries.

Required for Whom:

• Company Drivers (Employees): Workers’ compensation insurance is required for virtually all trucking companies that employ drivers. Each state has its own laws, but most states mandate that any employer with at least 1 employee carries workers’ comp (a few states have thresholds like 2–5 employees). Trucking companies must purchase a workers’ comp policy (or be self-insured in some cases) to cover their drivers and other employees. If a company driver is injured while working – for example, slipping off the trailer, getting in an accident, etc. – they file a workers’ comp claim through their employer. The employer’s insurance then pays benefits according to state law. Company drivers are therefore automatically covered and do not need to pay for this coverage themselves; it’s an employer-provided benefit mandated by law. It’s worth noting that workers’ comp covers injuries whether or not the employer was at fault and generally even if the employee was negligent (with limited exceptions), so it’s a very broad protection for the driver.
• Owner-Operators: True owner-operators (independent contractors without employees) are typically not required to carry workers’ comp for themselves. In fact, most state workers’ comp laws exempt self-employed individuals and independent contractors from coverage – they cannot even opt into workers’ comp in some cases, or if they can, it’s voluntary. An owner-operator with no employees is not an “employer” in the context of workers’ comp law, so they don’t have to buy a policy. Instead, as discussed, they would use occupational accident insurance or other health/disability insurance for injuries. However, if an owner-operator hires employees or drivers of their own, then they become an employer and must obtain workers’ compensation for those employees just like any other business. For instance, if an owner-operator grows into a small fleet and hires a second driver, the owner-op now needs a workers’ comp policy to cover that driver (and possibly themselves, depending on the state’s rules for business owners). Some states also have special provisions: for example, in certain cases, a contractor might be considered a statutory employee for workers’ comp purposes (though this is rare in trucking if the contracts are set up correctly). One notable situation is when motor carriers use independent contractors: some states (like Pennsylvania) have tried to require trucking contractors to be covered by some form of workers’ comp or occupational accident equivalent for lease operators, but generally the industry approach is Occ/Acc for contractors, not workers’ comp.

Coverage Details: Workers’ comp is governed by state statutes, so coverage details vary by state, but generally:

• Medical: All necessary medical care for the work injury is covered with no copay by the employee. This could include surgery, hospitalization, medication, therapy, etc., potentially for life if the injury causes chronic issues.
• Wage Replacement: If the employee cannot work due to the injury, workers’ comp pays a portion of their wage (commonly around 66% of the average weekly wage, subject to state minimums and maximums) during the disability period. Temporary total disability (TTD) is paid while off work recovering; if the injury causes permanent disability, there may be scheduled awards or lifetime payments in extreme cases.
• Death Benefit: If a driver is killed on the job, workers’ comp provides a funeral expense allowance and ongoing benefits to dependents (usually a percentage of wages to a surviving spouse and minor children, up to certain limits).
• No-Fault: Workers’ comp is no-fault – the employee doesn’t have to prove the employer did anything wrong, only that the injury arose out of and in the course of employment.
• Exclusive Remedy: In exchange for these guaranteed benefits, employees generally cannot sue their employer for negligence. Workers’ comp is the “exclusive remedy” for workplace injuries (except in egregious cases). This shields employers from lawsuits but ensures injured workers get some compensation even if an accident was just that – an accident.

For truck drivers, workers’ comp can cover injuries from crashes, loading/unloading accidents, repetitive strain (like back injuries from long driving), etc., as long as they’re job-related. It typically does not cover accidents that happen outside of work or while off-duty (whereas health insurance would cover those).

Mandatory vs. Optional: For employers, workers’ comp is mandatory in all states (with the sole exception that Texas does not require private employers to participate, though most trucking companies still do to avoid liability). Failing to carry required workers’ comp is a serious legal violation that can result in penalties, and if an employee is injured while the employer is uninsured, the employer may be liable for all costs and possibly punitive fines. So, for company drivers, workers’ comp coverage is effectively mandatory by law via their employer. They don’t have an option to waive it (even if an employee foolishly agreed to waive coverage, most states wouldn’t allow that contract to stand). For owner-operators, workers’ comp is usually not applicable/available unless they have opted in voluntarily or have employees. Some owner-operators choose to opt into a state’s workers’ comp system for self-coverage (if allowed) or buy a “ghost policy” for contract compliance, but this is uncommon compared to Occ/Acc.

In summary, workers’ comp is legally mandatory for company drivers (employers must have it), and not required for independent owner-ops (who use Occ/Acc if anything). An interesting note: a trucking company that uses only owner-operator contractors (no direct drivers) might not be required to have workers’ comp (since they technically have no employees), but many will either voluntarily cover contractors or be required by certain states to do so, or at least ensure contractors have Occ/Acc.

Cost: Workers’ compensation costs are borne by the employer. The cost is typically calculated per $100 of payroll, based on job risk classification rates set by state insurance boards or rating agencies (trucking is considered a higher-risk occupation, so the rate per $100 payroll can be several dollars). For example, if a truck driver earns $50,000 a year, and the workers’ comp rate is $8 per $100, the annual premium for that driver would be $4,000. Schneider’s owner-operator division estimates about $3,000–$5,000 per year per driver for workers’ comp in the trucking industry (How much is semi-truck insurance? Average costs and more) (which aligns with the above hypothetical). Large companies may self-insure or have deductibles to lower premiums, but the costs still ultimately average out. Company drivers do not pay any of this; it’s fully paid by employers (and it’s illegal in most states to charge employees for any part of workers’ comp insurance).

From the owner-operator perspective, if they have no employees, they pay $0 for workers’ comp (but then must consider Occ/Acc cost). If they do have an employee driver, they’ll start incurring these costs as any employer would.

Risk Exposure Differences: For company drivers, workers’ comp provides a significant safety net and reduces their personal risk. If they are hurt on the job, they will have their medical bills paid and receive disability pay as provided by law, which prevents catastrophic financial loss due to injuries. They generally cannot sue their employer, but in return they get certainty of coverage. The risk of medical expenses or lost wages is essentially transferred to the employer/insurer.

For owner-operators, not being covered by workers’ comp means they do not have a guaranteed safety net – their risk is higher. They must rely on their own insurance (Occ/Acc, health insurance, etc.) or savings if they get injured. If an independent owner-operator is severely injured and cannot work, there is no automatic wage compensation unless they set it up themselves. Also, an owner-operator who hires employees takes on the same responsibilities as any employer – if they fail to get workers’ comp for those employees, they could be personally liable for any injuries. So an owner-op that grows into a small fleet must manage that risk carefully.

From the carrier’s perspective, classifying drivers as owner-operators avoids the direct cost of workers’ comp premiums (instead shifting to Occ/Acc which is cheaper) (Best Occupational Accident Insurance for Truckers in 2025) (Best Occupational Accident Insurance for Truckers in 2025), but misclassification can be a major liability. If a purported owner-operator is found to really be an employee, the carrier could owe back workers’ comp premiums or face lawsuits. Thus, many carriers ensure even their contractors have either Occ/Acc or some equivalent coverage so that the contractor can’t claim the carrier left them unprotected.

In summary, workers’ comp vs. occupational accident represents a trade-off between comprehensive, legally mandated coverage for employees and flexible, less costly but limited coverage for contractors (Best Occupational Accident Insurance for Truckers in 2025). Company drivers benefit from workers’ comp’s strong protections, while owner-operators accept more personal risk and responsibility, mitigating it with optional Occ/Acc insurance as needed.

Cargo Insurance

Definition: Cargo insurance (often called motor truck cargo insurance) covers the loss, damage, or theft of freight/cargo that a truck is hauling. It protects the carrier (and sometimes the shipper) from financial loss if the goods are destroyed or injured in transit – for example, in a collision, fire, trailer overturn, or theft scenario.

Who Needs It:

• Owner-Operators: If operating under their own authority as a motor carrier, an owner-operator is typically expected (by customers and brokers) to carry cargo insurance. While federal law does not require cargo insurance for general freight carriers (except for certain specialized operations like household goods movers) (Frequently Asked Questions | Coverage, Liability, & More | OOIDA) (Frequently Asked Questions | Coverage, Liability, & More | OOIDA), virtually all shippers and brokers require proof of cargo coverage before they will tender loads. The most common cargo insurance requirement is $100,000 coverage per load (Frequently Asked Questions | Coverage, Liability, & More | OOIDA), which covers the value of most general freight (higher limits may be needed for high-value commodities like electronics, cars, etc.). An independent owner-operator will purchase a motor truck cargo insurance policy (often bundled with their liability coverage or as an add-on) to protect the goods they haul. If an owner-op is hauling under a lease to a carrier, the motor carrier’s cargo insurance covers the freight in that arrangement. By FMCSA regulation, the carrier whose authority is being used is responsible for cargo claims. Many carriers carry at least $100k cargo insurance and include leased owner-operators under that policy. The carrier may charge the owner-op a fee or deductible for cargo claims as per their lease terms, but the owner-op usually does not need a separate cargo policy if leased (indeed, FMCSA requires the carrier to file proof of cargo insurance for certain authorities, like household goods carriers) (Frequently Asked Questions | Coverage, Liability, & More | OOIDA) (Frequently Asked Questions | Coverage, Liability, & More | OOIDA). Some owner-operators still choose to get their own additional cargo insurance (or higher limits) if they haul particularly valuable loads or want extra protection beyond what the carrier provides, but this is optional.
• Company Drivers: Company drivers do not need to obtain cargo insurance; the trucking company provides cargo coverage for the loads its drivers haul. The employer’s motor truck cargo policy will pay if freight is damaged or lost while in transit under the company driver’s care. Company drivers are generally not held personally liable for cargo damage unless it’s due to intentional acts or gross negligence. For example, if a company driver is involved in an accident and $50,000 worth of product is ruined, the trucking company’s cargo insurance (or self-insurance fund) will cover the claim to the shipper. The driver might get a note in their record or retraining, but they wouldn’t be expected to insure or pay for the cargo. Therefore, cargo insurance is only a direct responsibility for carriers/owner-ops, not for employee drivers.

Coverage Details: A standard cargo insurance policy covers physical loss or damage to freight from external causes (collision, fire, theft, accidental damage, etc.) while it is in the carrier’s custody (from pick-up to delivery). Typical features:

• Coverage Limits: Usually a per occurrence (per load) limit, such as $100,000. Higher limits ($250k, $500k or more) can be purchased for specialized carriers. There may also be an aggregate limit or sublimits for certain items.
• Deductible: Carriers often have a deductible (e.g. $1,000 or $2,500) per cargo claim. The carrier or owner-op will pay this portion out-of-pocket when a claim occurs.
• Excluded Commodities: Some policies exclude or limit coverage for certain high-risk cargo (e.g. live animals, certain pharmaceuticals, jewelry, explosive hazmat) unless specifically added.
• Conditions: The policy may have requirements like attended vehicle warranty (e.g. the truck can’t be left unattended in high-theft areas), alarm systems for high-value loads, etc. If conditions aren’t met, a claim could be denied.
• Coverage Territory: Typically U.S. (and possibly Canada). Losses in Mexico usually are not covered by U.S. cargo insurance.

If freight is damaged, the insurance will pay the owner of the goods (or whoever is legally liable to the owner) the value of the lost/damaged cargo, up to the policy limit. The carrier is legally liable for cargo under the Carmack Amendment (for interstate commerce) with a few exceptions, so this insurance covers that liability. For owner-operators, having cargo insurance ensures they can compensate the shipper for any loss without it coming directly out of their pocket (beyond the deductible). For company drivers, the company’s policy plays the same role.

Mandatory vs. Optional: Surprisingly, federal regulations do not universally mandate cargo insurance for all carriers – except for certain categories like household goods movers, who must carry a small amount (e.g. $5,000 per vehicle, $10,000 per occurrence minimum) (Insurance Filing Requirements | FMCSA). However, in practice, cargo insurance is essentially mandatory commercially because no reputable broker or shipper will hire a carrier without it. It’s considered a standard requirement in contracts. Many states also require intrastate carriers to have cargo coverage in certain amounts. Therefore, an owner-operator with their own authority will almost certainly obtain cargo insurance even if not explicitly required by law, making it a de facto requirement. For a leased owner-operator, the motor carrier typically must provide cargo coverage (especially if the carrier is for-hire). For company drivers, there’s no legal requirement on the driver, but the carrier’s obligation to cover cargo (contractually or by common law liability) makes having insurance effectively mandatory for the carrier. So, broadly: mandatory for carriers (practically), optional for independent contractors only in a theoretical legal sense.

Cost: Cargo insurance is relatively affordable compared to liability insurance. Industry sources indicate a typical premium range of about $400 to $1,200 per truck per year for $100k cargo coverage (How much is semi-truck insurance? Average costs and more), though this can vary with the type of freight and claims history. For example, an owner-operator hauling general dry van freight might pay $800/year for $100k cargo with a $1k deductible. If hauling higher-risk commodities (e.g., electronics or refrigerated goods that could spoil), costs could be higher. Some carriers choose higher deductibles to lower premiums. Large fleets often self-insure cargo losses up to a point because it’s a manageable risk. To the owner-operator, this cost is a fraction of their liability insurance cost. Leased owner-operators often don’t pay a separate cargo premium; the carrier’s insurance covers it and any cost might be included in their lease. Company drivers, again, pay nothing; the employer absorbs cargo insurance costs.

Risk Differences: The risk related to cargo damage also falls differently on owner-operators vs company drivers:

• An owner-operator with own authority who lacks cargo insurance is taking a huge gamble – if a load is lost, they could owe the shipper tens or hundreds of thousands of dollars. With insurance, that risk is transferred to the insurer (minus deductible). Thus, cargo insurance shields the owner-operator’s business from potentially ruinous cargo claims. For example, if $80,000 of produce spoils due to a refrigeration breakdown, the insured owner-op’s policy pays the claim (assuming coverage for reefer breakdown), whereas an uninsured owner-op would have to cover it out-of-pocket or face legal action. Even with insurance, an owner-op might lose future business if they have frequent cargo claims, but at least one big incident won’t bankrupt them.
• A leased owner-operator typically has similar protection through the carrier’s insurance. However, the lease contract might hold the owner-op responsible for a deductible or for negligence. Some carriers will deduct the cargo claim deductible from the owner-op’s settlement if they were at fault. This means the owner-op’s risk is limited to that deductible amount in many cases.
• Company drivers have minimal direct risk in cargo loss. They are expected to care for the load, of course, but if something happens (accident, theft, etc.), it’s the company’s problem financially. The company might investigate and retrain or even terminate a driver who violates policy (say, leaves a trailer unlocked leading to theft), but the driver isn’t asked to pay for the loss typically. The company’s cargo insurer or internal funds cover it. The main risk to drivers is employment-related (you might lose your job over a severe cargo mishandling, but you won’t be sued by the shipper personally).

One more difference: Cargo value limits and specialized loads. If an owner-operator decides to haul a load above their insured limit (say they carry $100k policy but take a $250k load of electronics without updating coverage), they are at risk for the excess value. Company drivers usually won’t face this scenario because dispatch will ensure insurance is adequate for any load (and large carriers often have high limits or blanket coverage).

In summary, owner-operators must actively secure cargo insurance (usually $100k) to operate safely – it’s a standard cost of doing business under their own authority (Frequently Asked Questions | Coverage, Liability, & More | OOIDA) (Frequently Asked Questions | Coverage, Liability, & More | OOIDA). Leased owner-ops rely on the carrier’s cargo coverage but should understand any contractual liabilities. Company drivers are automatically protected by their employer’s cargo coverage and don’t manage this aspect, meaning their focus can remain on safely transporting the freight rather than insurance matters.

Physical Damage Insurance (Collision & Comprehensive for the Truck)

Definition: Physical damage insurance in trucking refers to coverage for damage to the truck itself. It typically includes collision coverage (for accidents where the truck collides with something or overturns) and comprehensive coverage (for non-collision incidents like theft, fire, vandalism, hail, or hitting an animal). Together, these protect the owner’s asset (the tractor and possibly trailer) against losses. It’s analogous to “full coverage” on a personal auto, but for commercial trucks it’s often simply called “physical damage” coverage.

Who Needs It:

• Owner-Operators: If an owner-operator owns (or finances/leases) their truck, they almost always will want physical damage insurance. Unlike liability, this coverage is not required by law, but if the truck is financed, the lienholder will require collision/comprehensive coverage to protect their interest (Truck Insurance – OOIDA). Even if not required, going without physical damage insurance means the owner-operator is choosing to “self-insure” the truck’s value – a potentially ruinous decision if the truck is wrecked or stolen. Most owner-operators therefore carry physical damage on their tractor (and trailer, if they also own the trailer). One exception: some owner-ops with very old trucks of low value might skip this to save money (essentially betting that they can afford the loss or that the truck isn’t worth insuring). But as a rule, owner-operators are responsible for insuring their own equipment. If the owner-operator is leased onto a carrier, the carrier does not insure the owner’s equipment for them (the carrier’s policy covers liability and maybe cargo, but the owner-op must cover their truck). Leased operators either get physical damage through a carrier’s insurance program or purchase their own policy independently. If operating under their own authority, it’s entirely on the owner-op to obtain this coverage for any equipment they own.
• Company Drivers: Company drivers do not purchase physical damage insurance; the trucking company carries insurance on its fleet vehicles. The carrier’s insurance (or self-insurance reserves) will pay for repairs or replacement of trucks/trailers damaged in accidents. For example, if a company driver rolls the truck and causes $50,000 in damage to the rig, the company’s physical damage insurance will cover it (minus the company’s deductible). The driver isn’t expected to insure the vehicle – in fact, they legally couldn’t, since they have no insurable interest (they don’t own the truck). The company may charge drivers for minor damages in some cases as a disciplinary measure (e.g. a careless backing dent might result in the driver paying a small portion or losing a safety bonus), but generally the financial burden of truck damage is on the company and its insurer, not the driver. Thus, physical damage coverage is an owner’s responsibility – and for company drivers, the “owner” is the employer.

Coverage Details: Physical damage insurance for trucks usually works on an Actual Cash Value (ACV) basis or a Stated Value basis. The owner declares a value for the truck (often the market value), and in the event of a total loss, the payout is either that stated amount or the actual cash value, whichever is less (to prevent over-insuring). For partial damage, the policy covers repair costs (minus deductible). Key features:

• Collision Coverage: pays for collision-related damages (e.g. overturn, hitting another vehicle or object).
• Comprehensive Coverage: pays for non-collision losses like theft of the truck, fire, vandalism, natural disasters, hitting a deer, etc.
• Deductibles: Owner-operators can choose deductibles (common amounts are $1,000, $2,500, $5,000). Higher deductibles lower the premium but mean more out-of-pocket if something happens.
• Included Extras: Some policies include or offer optional add-ons: towing coverage (heavy-duty tow bills can be large), gap coverage (if you lease/finance a truck and owe more than its value), and downtime coverage or rental reimbursement (to help with lost income or renting a replacement if your truck is in the shop). OOIDA’s physical damage program, for example, includes downtime coverage at no extra cost (Truck Insurance – OOIDA).
• Exclusions: Like any insurance, there are exclusions – e.g. intentional damage, using the truck for illegal purposes, etc., wouldn’t be covered.

For owner-operators, physical damage can apply to the tractor and potentially a trailer if they also own or are responsible for the trailer. For company operations, the fleet policy covers company-owned tractors and trailers.

Mandatory vs. Optional: Legally, physical damage insurance is optional. There is no law saying you must insure your own truck for damage. However, if the truck is under a loan or lease, the finance company will require full coverage (just as banks do for car loans). So for many owner-operators with truck payments, it becomes effectively mandatory via the contract. Once the truck is paid off, some might consider dropping it to save money, but most won’t because the truck is their livelihood. Operating without physical damage insurance means a single accident (even a no-fault deer strike or a garage fire) could wipe out the truck and leave the owner-op with no vehicle to make a living. Thus, in practice, virtually all responsible owner-operators carry physical damage coverage, except possibly those with inexpensive older trucks or significant savings to self-insure. For company drivers, it’s not even a question – the company will insure its assets. The driver cannot opt in or out; it’s simply part of the company’s balance sheet risk management. So from the driver’s perspective, it’s always provided (they may not even be explicitly aware of it, but trust that the company will fix or replace any damaged truck).

Cost: Physical damage insurance cost is generally based on the value of the equipment. A common rule of thumb is 3-5% of the truck’s value per year. For instance, if a tractor is worth $100,000, the annual premium might be $3,000–$5,000 (depending on deductible and coverage options). Schneider’s data shows a range of $1,500 to $4,000 per year for owner-operators’ physical damage insurance (How much is semi-truck insurance? Average costs and more), which fits that rule (a $1,500 premium likely covers a truck valued around $40k; $4,000 would cover a much higher value or a lower deductible). Owner-ops can adjust deductibles to target a premium that suits their budget, but they should ensure they could pay the chosen deductible if a loss occurs. It’s also worth noting that physical damage rates can be influenced by the driver’s loss history (if they have a history of frequent claims, rates go up). For company fleets, the cost is typically folded into overall fleet insurance costs – some large fleets self-insure physical damage up to a high retention, effectively paying most losses out-of-pocket and only insuring catastrophic loss or many losses in one year.

For a leased owner-operator, sometimes the carrier offers a physical damage program where the premium is deducted weekly. The owner-op can compare that to independent quotes. Often, carriers get decent group rates, but the owner-op might find a better deal on their own. Either way, it’s the owner-op paying for it (not the carrier).

Risk Differences: Having physical damage insurance greatly reduces the financial risk of asset loss for the truck owner:

• An owner-operator without physical damage insurance who wrecks their truck could lose their entire business asset with no compensation. They’d still owe any remaining loan balance and have to somehow fund a new truck or costly repairs out-of-pocket. This could be a devastating financial hit, potentially ending their career as an independent driver. With insurance, however, even if the truck is totaled, the owner-op would receive the ACV payout (which would pay off any loan and ideally provide some equity to use toward a replacement). Essentially, insurance ensures the owner-operator can recover from disasters that damage their equipment.
• For an owner-operator with insurance, the main risk is the deductible and any downtime. If their truck is in the shop, they might lose income unless they have downtime coverage or a backup truck. But at least the repair bill (which could be tens of thousands of dollars) is mostly covered. As long as the owner has saved enough to cover the deductible and maybe a few weeks of expenses, they can manage.
• Company drivers bear none of the above asset risk. If they crash a truck, the company fixes or replaces it. The driver might be reprimanded or even terminated if at fault, but they don’t have to pay for the damages. In some cases, a company might have policies like if a driver damages something minor, the cost is taken out of a performance bonus or something, but generally companies don’t dock driver pay for major accidents beyond possibly firing them. The company’s insurance or self-insurance handles the loss. So the company driver’s personal financial risk is essentially zero for truck damage. Their risk is job-related (safety record), not monetary.
• One nuance: some owner-operators operate on lease-purchase agreements with carriers (where the carrier is sort of the lienholder). In those cases, the carrier might handle the physical damage insurance and charge it back, but ultimately the cost and risk is still on the driver (they must pay for the insurance or the loss). If they fail to insure and something happens, the carrier will still come after them for the value per the contract.

In summary, physical damage insurance is a must for owner-operators to protect their vehicle investment, though not legally forced unless financed (Truck Insurance – OOIDA). Company drivers are fortunate to have their company absorb this risk – they can focus on driving safely, and if an accident occurs, it’s not their personal bank account that buys the next truck or pays the body shop.

Non-Trucking Liability (Bobtail Insurance)

Definition: Non-trucking liability insurance – often colloquially called “bobtail” insurance – provides liability coverage for a commercial truck when it is being operated for non-business, personal, or non-dispatch purposes. In other words, it covers you when the truck is on the road but not under load or not under the direction of a motor carrier. The term “bobtail” technically refers to driving a tractor without a trailer, but in insurance, bobtail or non-trucking liability (NTL) generally means any time the truck is being used outside of the scope of the carrier’s business. For example, if an owner-operator has delivered a load, is off the clock, and drives the tractor home (either bobtail or pulling an empty trailer for personal convenience), any accident during that trip could be covered by non-trucking liability.

Who Needs It:

• Owner-Operators: Non-trucking liability is primarily a concern for owner-operators who are leased to motor carriers. In a lease agreement, the motor carrier’s primary liability insurance covers the truck only when it is being used in the business of the carrier (under dispatch). When the truck is being used by the owner-operator for personal reasons or otherwise outside of dispatch, the carrier’s policy may not apply. Many carriers specifically require their leased contractors to have NTL/bobtail insurance to cover those gaps (How much is semi-truck insurance? Average costs and more). For instance, if a leased owner-op goes off duty for the weekend and bobtails to the store and causes an accident, the motor carrier’s insurance will deny the claim (since the truck was not being used for the carrier’s business at that time). The owner-op’s non-trucking liability policy would then step in to cover the damages to the third party. If the owner-operator has their own authority, they generally do not need bobtail insurance (Frequently Asked Questions | Coverage, Liability, & More | OOIDA) because their primary liability policy (in their own name) covers the truck at all times, whether loaded or empty, business or personal. Bobtail/NTL is specifically for when you are running under someone else’s authority and that someone else’s insurance isn’t in effect. So, in summary, leased owner-operators are the ones who typically carry bobtail (NTL) insurance, as either mandated by the carrier or out of prudent choice. This coverage is purchased by the owner-operator themselves (though sometimes offered through carrier programs), and the owner-op must maintain it as long as they want protection during non-dispatched operation.
• Company Drivers: Company drivers do not need non-trucking liability insurance personally. When a driver is employed by a carrier, any time they are driving the truck (even if bobtailing to head back to terminal or taking the truck home with permission), they are doing so as part of their employment, and the company’s insurance remains in effect. Generally, if a company allows a driver to use a truck for any personal conveyance, the company still covers that, as the truck is a company asset. In many cases, companies don’t allow much personal use of the truck (they might require it be parked when off duty), but either way, the driver wouldn’t go get a separate policy. The company might have an internal policy for bobtail use, but the liability is still on the company. There’s no scenario where an employed driver goes out and buys a bobtail liability policy – that’s exclusively an owner-operator product.

Coverage Details: Non-trucking liability (NTL) insurance provides liability coverage (bodily injury & property damage to others) when the truck is being used in a non-business capacity. It typically carries similar liability limits as a regular commercial policy (often $1 million CSL) to mirror what the carrier’s coverage would be if a major accident happened. However, NTL policies have strict definitions of when they apply:

• They usually exclude coverage when the truck is being used for any business purpose or furthering a commercial interest. This means if the owner-operator is under dispatch, en route to pick up a load, or doing anything that benefits the carrier, the NTL will not cover (because that’s when the carrier’s insurance should cover). It truly is for personal or non-work use.
• Examples of covered use: Driving bobtail to a restaurant or to the driver’s home after unloading and being released from duty; taking the truck for maintenance or washing on personal time (some policies might consider maintenance under business use if the carrier would have done it, but usually if it’s not during dispatch it’s fine); using the truck to visit family or run a personal errand.
• Examples of not covered (because considered business use): Deadheading (driving empty) to a shipper to pick up a new load – even though empty, that is clearly part of the business operation (carrier’s liability covers that, not bobtail); moving the truck as directed by the carrier; any time a load is being hauled (carrier’s primary covers that anyway).
• Deductibles: Liability claims typically don’t have deductibles for third-party claims, but some NTL policies might have a small property damage deductible.
• Some insurers differentiate “bobtail” vs “unladen” vs “non-trucking” coverage. Technically, “bobtail” might refer to driving without a trailer (regardless of purpose), and “unladen” could refer to driving with an empty trailer when not under dispatch. Many use these terms interchangeably though. OOIDA, for instance, offers both “Non-Trucking Liability” and “Unladen Liability/Bobtail” coverage to leased owner-ops, covering slightly different scenarios (Truck Insurance – OOIDA). For simplicity, they all serve to insure the owner-op when not hauling for the motor carrier.

Mandatory vs. Optional: Legally, bobtail/NTL insurance is optional – there’s no law compelling it. However, most motor carriers require their leased contractors to carry it as a condition of the lease. It is typically outlined in the lease agreement that the owner-operator must maintain non-trucking liability with at least X coverage and provide a certificate to the carrier. This protects the carrier from potential gray-area incidents. For example, if a contractor claims they were off duty but an accident occurs, the carrier wants to be able to say “that’s on the contractor’s bobtail insurance” if it truly wasn’t a work trip. For owner-operators with their own authority (again, no need for NTL in that case), they wouldn’t carry it. So, for leased owner-ops it’s effectively mandatory by company policy, and for others it’s not applicable. If an owner-operator tried to skip buying it despite a lease requiring it, they’d be in violation of the lease (and also exposing themselves to personal liability if an off-duty accident happens). As for company drivers, since they don’t need it, there’s no question of requirement – it’s simply not used in that context.

Cost: Non-trucking liability insurance is relatively inexpensive. It can cost around $30–$50 per month for owner-operators (bobtail insurance ? ooida – Trucker Forum – Trucking & Driving Forums), depending on driving record and state. Annually, that’s roughly $350–$600, which matches the Schneider example of about $350–$480 per year (How much is semi-truck insurance? Average costs and more). The cost is low because the truck isn’t supposed to be in business use during that coverage time, presumably meaning it’s driven less frequently under those conditions (and maybe at lighter weight if no trailer). Many owner-operators simply pay this monthly or have it deducted from settlements by the carrier if the carrier facilitates the policy.

Risk Differences: The need for non-trucking liability highlights a niche risk:

• For a leased owner-operator, if they did not have NTL coverage and had an accident while not under dispatch, they could find no insurance coverage available for the damages. The motor carrier would say the truck wasn’t on company business, and the owner-op’s personal auto insurance (if they even have a personal policy for a car) definitely won’t cover a commercial truck. That means the owner-op would be fully liable to pay for any third-party injuries/damages personally. This is a risk many might not think about until it happens. The financial exposure could be huge (imagine causing a serious crash on a Sunday drive home – the owner-op could face lawsuits just as bad as if it happened on the job, but without the carrier’s insurance backing them). Therefore, bobtail insurance is a critical risk mitigator for leased operators in those off-duty situations.
• With NTL insurance in place, the owner-op has peace of mind that even when they’re using the truck for themselves, they have liability protection up to the same high limits usually (often $1M). It essentially makes sure the truck is always insured, whether working or not. OOIDA’s guidance confirms that if you are under your own authority (thus your own liability covers always), you don’t need bobtail; but if you are leased, you definitely do (Frequently Asked Questions | Coverage, Liability, & More | OOIDA).
• Company drivers are covered by the company at all times when driving the truck, so they have no “gap” in coverage to worry about. If a company driver has the truck at home and drives it to the terminal on their day off (with permission), the company’s insurance is usually still on the hook because they allowed that use. If a company driver took a truck unauthorized for a personal jaunt, they would be in serious trouble (possibly considered theft of the vehicle); but even then, if an accident happened, likely the company’s insurance would end up involved since it’s their vehicle (though they might try to deny coverage for unauthorized use, leading to legal complexities). In any event, the driver themselves wouldn’t have an NTL policy to save them – they’d potentially face personal liability if they truly took a vehicle without authorization. But that’s a misconduct scenario. In normal operation, a company driver’s risk of being uninsured is nil; they are always covered when they’re supposed to be operating the vehicle.

In summary, non-trucking (bobtail) liability insurance is a small but important coverage for leased owner-operators, ensuring continuous liability protection even off the job (How much is semi-truck insurance? Average costs and more). It’s generally mandated by carriers for their contractors, and it’s part of the cost of doing business as an independent driver. Company drivers don’t deal with it at all – their trucks are covered by the employer 24/7, or they aren’t allowed to use them off-duty.

(Note: Sometimes people casually say “bobtail insurance” to mean physical damage coverage for the truck when not attached to a trailer, but in industry usage it usually refers to this non-trucking liability. We have used the term in the liability sense above.)

Uninsured/Underinsured Motorist Coverage

Definition: Uninsured motorist (UM) and underinsured motorist (UIM) coverage provide protection if the truck driver (or the truck) is involved in an accident where a third-party driver is at fault but has no insurance or insufficient insurance. UM/UIM coverage will pay for the insured’s own injuries and certain damages in that case, essentially stepping into the shoes of the at-fault party’s liability coverage. In personal auto policies, UM typically covers bodily injury to you and your passengers caused by an uninsured driver; UIM covers when the other driver has some insurance but not enough to cover your full damages. In commercial trucking policies, UM/UIM can cover bodily injury to the driver and sometimes damage to the truck/trailer if not otherwise covered.

Who Needs It:

• Owner-Operators: Owner-operators often carry UM/UIM as part of their commercial auto insurance package. If they have their own primary liability policy, UM/UIM is usually available up to the liability limit (many states require insurers to offer UM coverage equal to the liability limits, unless the insured rejects it in writing). It is generally optional coverage, but highly recommended. For an owner-operator, UM/UIM mainly provides additional coverage for their own injuries (and possibly lost income) if a car causes an accident and that car’s driver has no insurance. Why is this needed if the owner-op has other insurance? Consider a scenario: an owner-operator is driving and an uninsured drunk driver hits them head-on. The owner-op’s truck is wrecked and the owner-op is badly injured. The owner-op’s liability insurance doesn’t apply (they were not at fault). Their physical damage insurance will pay for the truck repairs (if they have collision coverage and likely after a deductible). But what about the owner-op’s injuries? If they have occupational accident insurance (and it was during work), that will cover a lot of medical and some lost income. If it was off work hours (personal use of truck) and they got hit, then their health insurance would cover medical. However, UM coverage can step in to cover things like medical bills, rehabilitation, and possibly pain-and-suffering or lost income that the at-fault driver would have been liable for if they had insurance. Essentially, UM/UIM lets the owner-operator recover damages from their own insurer that they otherwise could have sued the other driver for, had that driver been insured. Many owner-operators include UM/UIM for the bodily injury component as a safety net. Some states also have uninsured motorist property damage (UMPD) coverage, but if the owner-op has collision coverage on the truck, that usually covers truck damage regardless of fault (and then the insurer would subrogate if possible). Still, in a no-fault scenario with an uninsured at-fault driver, having UM could save the owner-op from paying their collision deductible or other costs. In summary, owner-operators with their own policy typically do carry UM/UIM or at least are offered it; the specific need depends on what other coverages they have (Occ/Acc, health, etc.), but given the relatively low cost, it’s a prudent inclusion.
• Company Drivers: Company drivers themselves do not purchase UM/UIM coverage – it is part of the employer’s insurance. Many commercial fleet policies include UM/UIM (though some states allow rejection of it, and fleets might reject if they feel it’s redundant due to workers’ comp). If a company driver is injured by an uninsured motorist while driving the company truck, normally workers’ comp will cover their medical bills and a portion of wages (since it’s an on-the-job injury). The company’s truck physical damage coverage will cover the truck repair (and the company’s insurer might then pursue the at-fault uninsured driver for recovery, but if that driver has no assets, there’s nothing to get). In such cases, UM coverage from the company’s policy might not be crucial for the employee driver’s medical (because of workers’ comp), but it could cover things like pain and suffering or the difference between workers’ comp wage benefits and full wage loss, depending on policy terms and state law. Some fleet policies might include at least minimal UM coverage to cover scenarios like a team driver or passenger who is not an employee – for instance, if the driver’s spouse is riding along (with authorization) and an uninsured driver hits them, the spouse isn’t covered by workers’ comp, so the UM would cover the spouse’s injuries. As a company driver, this is largely out of their hands; the presence or absence of UM on the company policy is up to the employer and state requirements. The company driver’s own personal auto UM (on their personal car insurance) does not apply when they’re in a company truck. So they rely on the company’s policy structure.

Coverage Details: UM/UIM coverage in trucking functions similarly to personal auto:

• It usually has equal limits to the liability coverage (e.g. $1,000,000 UM per accident) unless a lower limit is chosen.
• Uninsured Motorist (UM): pays when the at-fault party has no liability insurance (or is a hit-and-run driver who can’t be identified). It can cover the insured truck driver’s medical expenses, lost wages, and other injury-related damages. Some states allow it to cover property damage to the insured vehicle as well (if you don’t have collision or if collision has a deductible, sometimes UM PD can pay that).
• Underinsured Motorist (UIM): pays when the at-fault party has some insurance, but not enough. For example, if a car carries $25,000 liability and causes $100,000 of injury to the truck driver, UIM could pay the remaining $75,000 (again, depending on limits).
• Stacking & state differences: In some states, UM/UIM might not apply to commercial vehicles over a certain weight or might have special rules. But generally, insurers offer it.
• For an owner-op, a claim under UM might provide benefits similar to what a lawsuit would yield: medical bills reimbursement, compensation for pain, and even for damage to the truck (though the truck’s own collision coverage would normally handle that first).
• For a company, if they have UM, any payout for a company driver’s injuries would likely go to the company (or its insurer) if workers’ comp already paid the driver – sometimes there are subrogation issues between workers’ comp and UM. Often, companies might opt for lower UM limits or none (if allowed) to avoid that complication, figuring workers’ comp suffices for employee injuries.

Mandatory vs. Optional: UM/UIM requirements are set at the state level. Many states require that UM coverage be offered up to the same limit as liability, but allow the insured (the trucking company or owner-op) to reject it or select a lower limit in writing. A few states (e.g., New Jersey or Maryland for personal auto) mandate some level of UM coverage; for commercial, it varies. In essence, UM/UIM is optional but encouraged in most cases. For owner-operators, it’s their choice (unless state law says otherwise). It’s not mandated by federal trucking regulations at all. Some states might automatically include a minimum UM (like $20k) on commercial policies unless rejected. The savvy owner-operator will likely carry it for protection, but cost-sensitive ones might reject to save premium. For company fleets, the risk managers might reject UM if they think workers’ comp covers employees and they don’t have other vulnerable parties, or they might include it to cover scenarios like non-employee passengers.

Cost: UM/UIM coverage is usually a small fraction of the liability premium. For example, adding $1M UM might increase the premium by perhaps 5-10%. For an owner-op paying $10k for liability, UM/UIM might be an extra few hundred dollars. It’s hard to generalize, but it’s relatively cheap for the extra peace of mind. Many insurance packages just quote it bundled. If an owner-operator is pinching pennies, they might decline UM to save maybe $500/year, but that could be a poor trade-off given the coverage it provides. Company fleets with hundreds of trucks might save a lot by rejecting UM (given workers’ comp covers employees anyway).

Risk Differences: The presence or absence of UM/UIM mostly affects the truck driver’s own injury recovery prospects when an at-fault third party lacks adequate insurance:

• An owner-operator with UM coverage is protected in scenarios where otherwise they might have no recourse. If hit by an uninsured driver, the owner-op can file a UM claim and have medical bills or even an injury settlement paid by their own insurer. Without UM, the owner-op would have to rely on health insurance for medical bills (which might have copays/out-of-pocket costs) and would get nothing for things like pain, suffering, or lost income (except whatever Occ/Acc might pay in disability). So UM adds a layer of financial safety. Without UM, the owner-op’s risk is that an uninsured motorist causes them serious harm and they get limited compensation. They could sue the at-fault driver personally, but if that person has no insurance, they often have no assets either – making recovery unlikely.
• For company drivers, if the company policy has no UM, the driver still has workers’ comp to cover medical and a portion of lost wages for on-the-job injuries. They wouldn’t be able to recover non-economic damages (like pain & suffering) from anyone (since you can’t sue your employer due to comp exclusivity, and the at-fault had no insurance and likely no assets). If the company policy does have UM, the driver might indirectly benefit – possibly the workers’ comp insurer might use it to reimburse what they paid, or in some cases, the driver might get additional compensation through a settlement (laws vary on whether an employee can directly claim under employer’s UM – often any UM payout would go to offset comp). If the accident happened off the job (e.g., a personal errand in the company truck, if allowed), workers’ comp wouldn’t apply, so UM would be very important to cover the driver’s injuries. But generally, company drivers rely on comp.
• Owner-operators have more to consider: if they want full protection, they ideally should have both Occ/Acc (for immediate injury benefits) and UM (for additional damages caused by a third party). These can complement each other without overlapping completely.

In summary, UM/UIM coverage is important for owner-operators as part of a robust insurance plan, though not legally required (How much is semi-truck insurance? Average costs and more). It protects them from others’ lack of insurance. For company drivers, UM/UIM is more of a background coverage handled by the employer’s policy; the driver’s main protection for injuries remains workers’ comp, with UM playing a secondary role if at all.

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Summary Comparison Table

To recap the differences in insurance needs and responsibilities between owner-operators and company drivers, the table below summarizes each major policy type, noting whether it’s required, who is responsible for it, and key points for each group:

Insurance Type	Owner-Operator (Independent Driver)	Company Driver (Employed Driver)
Commercial Auto Liability (Primary truck liability for third-party injuries & damage)	Required by law if operating under own authority (minimum $750k coverage; $1M standard) ([Frequently Asked Questions	Coverage, Liability, & More
General Liability (Non-vehicle business liability)	Optional but common for carriers with own authority. Covers business risks off the road (e.g. someone injured on your premises). Owner-ops with authority often carry $1M general liability (How much is semi-truck insurance? Average costs and more) for shipper contracts. Leased owner-ops typically not required to have this (covered by carrier’s general liability if any).	Employer’s responsibility. Trucking companies often carry general liability for their business operations; company drivers are covered by employer’s policy if, say, a third party is injured at a loading dock. Drivers do not carry separate GL policies.
Cargo Insurance (Damage or loss of freight)	Effectively required for anyone hauling under own authority (usually $100k coverage per load is standard) ([Frequently Asked Questions	Coverage, Liability, & More
Physical Damage (Collision & Comprehensive) (Coverage for truck/trailer owned by operator)	Optional by law, but essential to protect the owner-operator’s asset. Covers the truck in accidents, theft, etc. Owner-operator must buy this to cover their own truck (and trailer if owned), especially if financed (lender will require it) (Truck Insurance – OOIDA). Leased or own authority, either way the owner-op is responsible for insuring their equipment (carrier does not cover contractor’s truck damage).	Company covers – the carrier insures its fleet’s physical assets. The driver doesn’t need to insure the truck personally (no insurable interest). If a company truck is wrecked, the company’s policy pays for repairs/replacement. Not legally mandated, but standard business practice for companies to insure their vehicles.
Non-Trucking Liability (Bobtail) (Liability when not driving for business)	Required by carriers for leased owner-operators in most cases (How much is semi-truck insurance? Average costs and more). Covers the owner-op’s truck when used off-duty (personal use/not under dispatch). Owner-operator must purchase and keep this as long as leased to carrier (fills gap when carrier’s liability doesn’t apply) ([Frequently Asked Questions	Coverage, Liability, & More
Occupational Accident (Work-injury insurance for independent contractors)	Often required by contract (and strongly recommended) for owner-operators who are not covered by workers’ comp (Best Occupational Accident Insurance for Truckers in 2025). Provides medical, disability, death benefits if injured on the job. Owner-op either buys their own policy or enrolls in carrier’s program. Not mandated by law (Best Occupational Accident Insurance for Truckers in 2025), but many carry it to protect themselves (cheaper alternative to workers’ comp) (Best Occupational Accident Insurance for Truckers in 2025).	Not applicable to employees. Company drivers are covered under workers’ compensation for on-job injuries, so they do not use occupational accident insurance. (In rare cases of no workers’ comp (e.g., TX opt-out), an employer might provide a similar accident policy – but the driver does not purchase it themselves.)
Workers’ Compensation (Statutory employee injury coverage)	Generally not required (or available) for sole proprietor owner-operators. They are exempt as independent contractors (Best Occupational Accident Insurance for Truckers in 2025). Instead, they use Occ/Acc or health insurance for injuries. If an owner-operator has employees of their own, then they must carry workers’ comp for those employees per state law. They might also choose to cover themselves voluntarily in some cases, but typically they don’t have it for themselves.	Legally required for employers – trucking companies must carry workers’ comp insurance covering their company drivers (in all states except certain opt-out scenarios). So provided by the employer, mandatory by law (Best Occupational Accident Insurance for Truckers in 2025). Company drivers are automatically covered for any work-related injury, with benefits defined by state law. Drivers do not pay for this coverage (employer-funded via premiums).
Health Insurance (General medical insurance for personal health)	Not provided by any carrier – owner-operators must obtain their own health insurance for non-work-related medical coverage. They can buy individual/family plans (e.g. through ACA marketplace or associations like OOIDA) ([What You Need to Know About Owner-Operator Health Insurance	altLINE](https://altline.sobanco.com/owner-operator-health-insurance/#:~:text=Owner,liability%20insurance%20and%20bobtail%20insurance)). There is no employer, so this is a personal expense. Many owner-ops pay hundreds per month for health insurance (average ~$484/month for self-employed individuals) ([What You Need to Know About Owner-Operator Health Insurance
Uninsured/Underinsured Motorist (UM/UIM) (Coverage if hit by an uninsured third party)	Optional add-on to the owner-operator’s policy (encouraged in most states). Protects the owner-op for injuries/damages if another driver is at fault and has no or not enough insurance (How much is semi-truck insurance? Average costs and more). Usually the owner-op can choose to carry it up to their liability limit. Many do carry UM/UIM for extra protection, though one could reject it to save cost. It’s especially useful since an owner-op has no employer to fall back on for benefits in such scenarios.	Included in employer’s policy if the company chooses. Company drivers themselves don’t select UM coverage; it’s handled by the fleet policy. Some companies carry it (to cover things like injuries to driver or passengers caused by uninsured motorists), while others may reject it if allowed, relying on workers’ comp for employee injuries. Either way, the company driver does not pay for it or file for it separately – any UM claim would be handled between the employer (or its insurer) and the driver as appropriate.

Notes: In all cases above, the term “required” can refer to legal requirements or industry-standard requirements. For owner-operators, many “optional” coverages (like physical damage or health insurance) are practically essential for business continuity and personal well-being, even if not mandated by law. Company drivers benefit from their employer’s compliance with legal mandates (liability, workers’ comp, etc.) and typically from employer-provided benefits (health insurance, etc.), meaning their focus can be on safe driving rather than procuring insurance. Owner-operators, essentially running a small business, must budget for and manage a wide array of insurance policies to protect themselves, their equipment, and their livelihood. The costs reflect that: an owner-operator under their own authority may spend tens of thousands per year on various insurance premiums (How much is semi-truck insurance? Average costs and more), whereas a company driver’s direct insurance cost is minimal or zero (the cost is borne by the employer). This difference in responsibility is one of the major trade-offs between being an independent owner-operator and a company driver (Owner/Operator vs Company Driver: What’s the difference? – Sunburst Truck Lines).

Overall, the risk exposure for owner-operators is higher due to these insurance responsibilities: they must not only pay premiums but also carefully choose coverage levels to avoid underinsuring (which could expose them to business-ending losses). Company drivers have lower personal risk in these areas because the trucking company’s insurance and policies shield them; their main risk is job loss or injury (which is mitigated by workers’ comp and health benefits). Both roles require safe driving and adherence to regulations, but from an insurance standpoint, the owner-operator is essentially both the driver and the insurer/insured business owner, while the company driver is only the driver, with the carrier taking care of insurance matters.

Sources:

• Owner-Operator Independent Drivers Association (OOIDA) – Insurance FAQs and coverage guidelines (Frequently Asked Questions | Coverage, Liability, & More | OOIDA) (Frequently Asked Questions | Coverage, Liability, & More | OOIDA) (Frequently Asked Questions | Coverage, Liability, & More | OOIDA)
• Schneider Owner-Operator Division – Insurance requirements and cost breakdowns (How much is semi-truck insurance? Average costs and more) (How much is semi-truck insurance? Average costs and more)
• TruckInfo (Kyle Fretwell) – Guide on Occupational Accident vs. Workers’ Comp for Truckers, 2025 (Best Occupational Accident Insurance for Truckers in 2025) (Best Occupational Accident Insurance for Truckers in 2025)
• Sunburst Truck Lines – Comparison of owner-operator vs company driver responsibilities (Owner/Operator vs Company Driver: What’s the difference? – Sunburst Truck Lines)
• Progressive Commercial – Owner-Operator insurance coverages (liability, cargo, physical damage, bobtail) (Owner Operator Insurance | Progressive Commercial) (Owner Operator Insurance | Progressive Commercial)
• OOIDA – “Truck Insurance” programs for owner-ops (primary liability, cargo, etc.) (Frequently Asked Questions | Coverage, Liability, & More | OOIDA) (Frequently Asked Questions | Coverage, Liability, & More | OOIDA)
• Altline (Southern Bank) – Owner-Operator insurance overview (authority vs lease requirements, health insurance) (What You Need to Know About Owner-Operator Health Insurance | altLINE) (What You Need to Know About Owner-Operator Health Insurance | altLINE)
• FMCSA Regulations – Insurance minimums (FMCSA Form MCS-90 requirements) (Frequently Asked Questions | Coverage, Liability, & More | OOIDA) and cargo insurance filings for household goods (Insurance Filing Requirements | FMCSA)
• Industry Forums/Articles – Cost estimates (physical damage ~2-4% value, bobtail ~$30/month) (bobtail insurance ? ooida – Trucker Forum – Trucking & Driving Forums) and general industry knowledge on insurance practices.