Does My Business Need Transportation Insurance?

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Transportation insurance is a category of commercial insurance coverage recommended for motor carriers and other businesses involved in the transportation of goods. A typical transportation insurance policy may include commercial auto insurance, cargo insurance and other coverage types.

Read on to learn what transit insurance usually covers, how much you may have to pay for coverage and how you can secure adequate transportation insurance for a business.

Key Takeaways

  • While some insurers offer customized insurance solutions for transportation businesses, you may also be able to meet your business’ needs by individually purchasing various coverage types.
  • Transportation and logistics companies need commercial auto insurance that includes liability coverage, physical damage coverage and potentially other protections depending on your state’s requirements and the specific risks your business faces.
  • You can insure your cargo throughout each stage of the transportation process by purchasing freight insurance that includes inland marine, ocean marine and air cargo coverage.
  • Commercial insurance premiums for semi-truck owner-operators range from $14,750 to $26,840 per year on average but your exact costs will depend largely on your policy details and the characteristics of your business.

What Is Transportation Insurance?

Transportation insurance refers to an insurance package that addresses the unique risks faced by businesses in the transportation and logistics industry. Some insurance companies may offer specialized transportation insurance services that you can customize as necessary to meet the needs of your business. Other insurers may not offer a singular transport insurance product but may still allow you to separately purchase multiple useful coverage types to build your own transportation insurance policy.

What Types of Transportation Insurance Are There?

The primary components of transportation insurance coverage are commercial auto insurance and cargo insurance, also known as freight insurance. Commercial car insurance covers your vehicles and others on the road with them in case they are involved in an accident, while freight insurance covers the merchandise your vehicles are carrying. Examples of cargo insurance include inland marine, ocean marine and air cargo insurance.

In addition, your policy may include other commercial insurance coverages that are likely to benefit a transportation business such as workers’ compensation, general liability, commercial property, business interruption, commercial umbrella and environmental insurance.

Who Is Transit and Transportation Insurance For?

Transit and transportation insurance is ideal for private companies that transport goods themselves or assist other companies in the transportation of goods. Additionally, coverage can be valuable for companies that transport passengers rather than products.

Examples of businesses that may need to shop for this type of coverage include the following:

  • Trucking companies
  • Manufacturers and distributors with their own fleets
  • Importers and exporters
  • Freight forwarders
  • Logistics service providers
  • Warehouse owners
  • Hazardous waste transporters
  • Rental car companies
  • Private ambulance services
  • Drivers for private transportation companies such as bus operators and taxi drivers

What Does Transportation Insurance Cover?

Commercial auto insurance policies generally include liability insurance that covers other people’s medical expenses and property repairs after a crash your business is held liable for. Meanwhile, you should add physical damage coverage that pays for repairs to your own commercial vehicles after an accident or an external force like a natural disaster. You may be able to further customize your policy to cover your own drivers’ hospital bills, commercial property damage related to an uninsured or underinsured driver and towing costs.

In addition, you can extend your commercial auto coverage to scenarios outside of the scope of your normal business operations by adding bobtail and deadhead coverage to your policy.

Bobtail insurance covers your trucks when they are driven without their trailers attached, while deadhead insurance covers them when their trailers are empty because their cargo has been unloaded and the trailers have not yet been reloaded.[1]

Meanwhile, a collection of multiple types of freight insurance can cover your cargo throughout the whole transportation process whether it is being shipped by land, sea or air. Some cargo insurance policies provide coverage on an open peril basis. Examples of perils that may be covered include the following:[2]

  • Fire and explosions
  • Theft and vandalism
  • Collisions
  • Overturning of vehicles, sinking of ships or derailment of trains
  • Floods, storms, earthquakes and lightning strikes
  • Pilferage and shortage
  • Deterioration and rust
  • Rot and spoilage

What Isn’t Covered?

Commercial auto insurance generally won’t cover personal vehicles owned by you or your employees. However, it may cover company-owned vehicles while you use them for non-business purposes if you add non-trucking liability insurance to your policy.[1]

Meanwhile, cargo insurance policies often exclude coverage for the following perils:[2]

  • Intentional misconduct
  • Delay or loss of market
  • Wear and tear, ordinary leakage or ordinary loss in weight or volume
  • Faulty design or poor construction
  • War or terrorism
  • Nuclear hazards

How Much Does Transportation Insurance Cost?

Since transportation insurance is often highly customizable, your premiums will largely depend on the coverage types and limits you select for your policy along with factors like the size of your fleet, the distance your vehicles travel on a regular basis and your company’s prior history regarding insurance claims, finances and safety. For example, semi-truck owner-operators pay $14,750 to $26,480 per year for commercial auto, general liability, workers’ compensation and cargo coverage on average.[3]

Does My Business Need Transportation Insurance?

Commercial auto insurance is required by law for most businesses in most states, as is workers’ compensation insurance.[4][5] In addition, the Federal Motor Carrier Safety Administration (FMCSA) requires all motor carriers of household goods to maintain cargo insurance.[6]

How To Get Transportation Insurance for Your Commercial Business

To find the best transportation insurance for business activities, you should strongly consider looking over quotes from at least to three to five different insurers. You should be prepared to provide information about your business’ location, revenue and coverage needs to get these quotes. Of course, this can make for an arduous process if you reach out to insurance carriers one by one.

Instead, consider using SmartFinancial to make the comparison shopping process easy. You can start the process by simply filling out a brief questionnaire form and allowing us to help you find policies that match your requirements. Click here and we can get you in touch with an agent who can provide you with free commercial insurance quotes today.

Get a Free Insurance Quote for Your Transportation Business!


How does transportation insurance work?

One of the main purposes of transportation coverage is to insure your freight throughout the entire delivery process and to reimburse you for financial losses you experience due to lost freight. Your policy should also insure your commercial vehicles and drivers and provide liability coverage for accidents your business is held responsible for.

Who can buy a transit insurance policy?

You should consider buying transportation insurance for small business purposes if you transport people or goods for a living or coordinate this kind of transportation for a living.

Is inland marine insurance the same as transportation insurance?

Inland marine cargo insurance should be one part of a broader transportation insurance package along with commercial auto insurance and other types of cargo insurance. Inland marine insurance covers commercial property including cargo while it is in transit over land.

Should I get freight insurance if I have transportation insurance?

Freight insurance is a type of coverage that insures your cargo while in transit and should be part of a broader transportation insurance package that also includes commercial auto insurance and potentially other coverage types.


  1. The Hartford. “Non-Trucking Liability Insurance.” Accessed April 1, 2024.
  2. Roanoke Insurance Group. “What’s Covered and Excluded in a Cargo Insurance Policy?” Accessed April 1, 2024.
  3. Schneider Owner-Operators. “How Much Is Semi-Truck Insurance? Average Costs and More.” Accessed April 1, 2024.
  4. Nationwide. “Commercial Auto Liability Insurance.” Accessed April 1, 2024.
  5. National Federation of Independent Business. “Workers’ Compensation Laws – State by State Comparison.” Accessed April 1, 2024.
  6. Federal Motor Carrier Safety Administration. “Types of Operating Authority.” Accessed April 2, 2024.

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