Owner-Operator Coverage, Lease by Lease

When you are leased on to a motor carrier

Federal leasing rules require the carrier that holds the authority to keep public liability coverage for leased equipment while it operates under that carrier's authority. The lease must spell out which other insurance the owner-operator is responsible for. In practice, leased-on owner-operators commonly carry physical damage on their own truck, non-trucking or bobtail liability for times they are not under dispatch, and often occupational accident coverage.

When you run under your own authority

With your own USDOT and MC numbers you become the motor carrier. You need primary auto liability with a filing to FMCSA, and most customers expect motor truck cargo. Physical damage, general liability and occupational accident or workers comp round out the package. The cost and the paperwork both go up, so plan the switch carefully.

What every owner-operator should check

• The insurance section of the lease agreement
• Whether the carrier charges insurance back against your settlements and in what amount
• Which policy covers you when you drive the truck for personal errands
• Who insures the trailer you pull
• What happens to coverage on the day the lease ends

Physical damage on a financed truck

Lenders require physical damage coverage on financed tractors and want to be listed as loss payee. Set the stated value or limit close to what the truck is worth today, not what you paid. If the truck is totaled, an inadequate limit leaves you owing the lender.

Coverage topics

Frequently asked questions