As the economy continues to recover from the past recession, now might be the time to consider some additional protection for you, your family and your business. As an owner operator or small fleet owner, your immediate insurance needs have been dictated by government regulation, the shipper or broker, and your bank. These coverages, for the most part, protect a third party. Your Liability coverage provides payment for bodily injury and/or property damage to someone other than yourself that you have a legal obligation to pay. Your Physical Damage coverage protects the lender and any interests that you have in the insured equipment. Your Cargo coverage protects the shipper and/or broker. These are the three basic parts that make up your insurance package.
With all that said, now may be the time to consider some other available sources of security for YOU and YOUR business. As a business owner, you only have yourself to fall back on in the event of any unexpected event that may result in a financial loss. Unlike being employed, where the employer covers such things as injury (Worker’s Compensation) or medical expenses, some unforeseen expenses may be mitigated through the purchase of additional forms of coverage for you and your business.
There are a host of products available to the owner operator or small business owner. Look at your fuel bill – I’m sure that it includes a pitch for accident, term life insurance, dental or whatever. If you buy anything, consult with a professional and do not purchase anything as a result of a knee-jerk reaction. I have picked out three products that may provide you with a little more security than what you may have now. Age and family dynamics have a role to play. When you’re young, not much bothers you, but as you mature and your responsibilities grow, it may be time to rethink what you mean to your obligations and to prepare for whatever may happen.
Roadside Emergency Assistance. You make your living off of your ability to provide a transportation service to your brokers and shippers. Time equals money, and you might be put into a situation that may jeopardize the delivery of the product on your vehicle. This coverage is cheap and includes service nationwide, to include Canada, 24 hours a day, 365 days a year. This is a membership program and the services should be reviewed and understood completely before purchasing the product. There are limits on each provided service, which may include towing; flat tire assistance; tire replacement assistance; mobile mechanic service; oil and water (and other fluids) delivery service; fuel delivery service; lock-out/key replacement assistance; jump starts and/or battery replacement service; and replacement parts and delivery service. Premiums start at around $400 a year. Talk to your plan representative for a firm price on this product.
Occupational Accident Insurance – Individual Owner Operator. Many prime carriers require their owner operators to have this coverage. Think of it as your own Worker’s Compensation plan. It is not Worker’s Comp, but it provides the owner operator with benefits in the event of a covered health/life accident. The following benefits are taken from one such plan, as an example. Before purchasing this type of plan, you should consult the carrier for the exact benefits they provide. 1) Medical Coverage: freedom of choice for your doctor. You can see your family physician and the specialists recommended by your doctor to treat your covered accidental injuries, up to one million dollars in medical coverage; 2) Continuous Total Disability: if your injury results in a permanent total disability, you may qualify for the Continuous Disability benefit once your Temporary Total Disability benefits expire; 3) Accidental Death and Dismemberment: this coverage provides security for your family should you lose a limb, the sight in your eye, suffer paralysis or get a severe burn from a covered accidental injury. The AD&D benefit is designed to help you and your family adjust to a total lifestyle change, if necessary. There is a death benefit included, and that coverage will provide for your dependents, should you not survive a covered accidental injury. Premiums range around $1,800 per year and can be paid monthly, but the final price will be determined by the actual plan you choose.
Life Insurance. The decision for purchasing life insurance depends a great deal on the objective of the purchaser. For the most part, the purchase revolves around the necessity to provide security to his/her family. Other objectives could be to cover a debt in the event of death. Life insurance is also sometimes used as a long-term financial planning tool. Basically, there are two types of coverage – Term and various versions of Whole and Universal Life. Term Life is the cheapest way of purchasing life insurance. The premium is primarily based on age and, as you get older, the rate increases. You can purchase Term Life in blocks of 5, 10, 15 or 20 years with a guaranteed rate for the life of the plan that you choose. If you require coverage beyond the term, the premium will increase. Some plans will provide for a conversion, but it is based again on age. The coverage is only in force as long as the premium is paid. Whole Life, Modified Whole Life and Universal Life, to name a few, provide coverage for the duration of your life. This coverage provides a consistent premium through the covered individual’s life. Since the loss of interest income by the insurance industry, such products as Universal Life, even though used, does not have the benefit that it once had when interest rates were higher.
Insurance is a must in the trucking industry, but why not make sure that you are protected just as much (or more) as every other entity that is attached to your business. Now is the time – don’t wait! If you have any comments or questions, or if you wish to discuss any insurance-related issue further, I can be reached at California Plus Insurance Service in Modesto, CA at 800-699-7101.