Truckers workers compensation coverage can be expensive and difficult to obtain in some states. Still, it’s a necessary coverage that every fleet owner and many owner-operators should have.
When shopping and comparing workers’ comp policies, it’s important to understand what your policy should cover, how much you can expect to spend, and which factors may affect your premiums.
Do You Need Truckers Workers Compensation?
If you have a fleet of trucks and employ drivers, you likely need a workers’ compensation policy. Every time your truckers hit the road, there’s a risk of:
Serious injuries from accidents or while loading/unloading freight
Slips and falls while entering or exiting the truck
Without proper worker’s comp coverage, you may be responsible for employee medical bills if they’re injured on the job. One or two injuries are all it takes to bankrupt a business. Furthermore, most states require companies to have workers’ compensation coverage by law. Failing to have coverage can result in stiff penalties and fines.
Do Owner-Operators Need Workers Compensation Insurance Coverage?
If you operate as an owner-operator, you may be wondering whether you need long-haul trucking workers compensation insurance coverage.
Whether or not you need coverage will depend on whether you have employees. If you’re operating under your own authority and with zero employees, then you likely do not need workers’ compensation coverage.
However, if you’re an owner-operator who leases onto a motor carrier, then you may need Occupational Accident Insurance (OAI). While not the same as workers’ comp, it provides similar coverage. Some motor carriers will require you to purchase this coverage, while others will provide it.
It’s important to note that OAI is not exactly the same as workers’ comp, although similar. The benefits limit is generally lower, and you may receive limited medical coverage.
A workers’ comp policy will provide more comprehensive coverage, but it will come at a higher cost.
Whether you’re running a fleet or operating as an owner-operator, it’s essential to check your local and state laws and regulations to make sure that you are properly covered (if necessary) and in compliance with laws.
What Should Your Policy Cover?
In general, a workers’ compensation policy should cover:
Medical treatment: Hospital and doctor visits, surgery, medication, rehabilitation, medical devices, tests and exam and other medical costs related to the injury.
Lost income and compensation for severe or permanent injuries.
Death benefits, including compensation for surviving dependents and funeral costs.
Employer liability coverage, which protects you from lawsuits from injured workers. It can cover the cost of attorney fees, court costs and settlements or judgments.
Some states require employers to purchase their workers’ comp from a state fund, such as:
In these cases, employer liability coverage is not included. However, fleet owners can purchase stop gap coverage to cover employer liability.
Workers’ compensation policies do not cover:
Injuries caused by company policy violations, or drugs or intoxication.
Injuries to independent contractors.
Wages for temporary workers.
How Much is Workers Comp Insurance for Truck Drivers?
Trucking companies can leverage pay-as-you-go rates for trucking workers comp to maintain cash flow. As your fleet grows, your costs will inevitably rise, making it difficult to pinpoint the exact cost of your insurance policy.
Understanding Rates Per Driver for Workers Compensation
As more truck drivers are added to your policy, the risks for the insurer also rise. Traditionally, there’s a base rate that you’ll pay per driver for insurance. Rates will fluctuate based on many factors, such as:
The type of freight hauled
Loading and unloading responsibilities
Long haul or local driving
Due to the many variables that determine risks and costs, trucking workers comp is usually based on a percentage of the driver’s salary. For example, the going rate is somewhere between 8% and 15% of the salary.
Truckers Workers Compensation Cost Estimates
TruckDriversSalary.com has their most recent 2021 average truck driver salary of $57,194. Based on this figure, your premiums for workers compensation would be:
$6,012 per year on the low end
$10,219 per year on the high end
Of course, you would pay for these premiums monthly, which means you would pay between $500 and $1,000 a month per driver. So, if you have a fleet of 5 drivers, you may be paying $31,000 to just under $58,000 a year for workers’ comp insurance.
Since these are averages, you may pay more or less, depending on your location.
If your drivers are in New York City or California, you’ll likely be paying them more and will have a higher rate on your premium. Workers comp codes will also impact your overall rates.
How Workers Comp Codes for Trucking Companies Affects Rates
Truckers workers compensation is priced by classification. Improper classification can cost you a significant amount of money per driver. For many fleets, it’s common to have a wide range of classifications.
Classification codes include:
7219: A common code for both local and long haul drivers.
7228: Former codes would include 7228, which indicates a driver that is operating in a 200-mile radius or less.
7229: Another former code for long haul drivers that had a driving radius of 200+ miles from the garage.
7230: A code that’s used for most delivery and parcel delivery drivers.
Of course, these are just a few of the many codes you’ll come across. There are also codes for contracting with USPS, such as 7232. Other codes exist, such as 7196 | Milk Hauling for the state of New Jersey.
Codes are a great example of how insurers will dissect your operations to better quote your insurance rates. Guaranteed cost and deductible options are also available. Working with the right insurer will provide your drivers with the best coverage at an affordable rate for your business.
Trucking workers comp is crucial to protect your drivers if they’re injured on the job. While some states may not require workers comp, it’s a perk that attracts high-end drivers to your fleet.
Comparing quotes and working with a pay-as-you-go operator is the best way to maintain cash flow and keep premiums manageable.