by Edwardo Sneneh

The truck transportation of cargo represents a base in the domain of logistics that is utilized by almost any business trying to ship and receive stuff. This great demand affiliated with goods transportation has inspired a generation of large businesses using many different operators; smaller companies seeking out to get off the ground with more local resources, as well as private owner-operators working on a contractual obligation. When you are a trucking company or individual trucker looking to take advantage of the high truck transportation demand, it becomes crucial to invest in learning about the protection found with trailer interchange insurance.

Definition and Types of Trailer Interchange

Trailer Interchange is a physical damage insurance on trailers that a truck is pulling, or is under the control of that trucking company, and that is not owned or leased for the restricted use of the trucking company. The coverage does apply as comprehensive (fire, theft, etc.) and collision overturn and colliding with an object to a trailer pulled by a trucking company under an agreement (ie, non owned trailer.)

When looking to take advantage of this protection opportunity, a person should start with building an understanding of what it protects. Most trucking and transportation organizations do not utilize only their own truck-tractors and trailers to transport items from place to place. Instead these transportation companies utilize leased drivers and their trucks to pick up different trailers owned by other businesses to transport goods from one place to another. With trailer interchange insurance you are acquiring a coverage that will give protection to a trailer owned by a third party in the bad case of an accident or if damage were to happen to the trailer.


An Integral Part of A Trucking Policy

Most trucking policies come with these coverages. As we will see, trailer interchange coverage is an integrated part of trucking policy:
  • Primary auto liability: Has minimum set by either local or federal government,  based on the nature of the business, weight of trucks, and classification of cargo hauled.
  • Cargo liability: Has minimum set by either local or federal government, based mostly on weight of trucks.
  • Trailer interchange: Usually comes in the amount of $25.000 to cover non owned trailers.
  • Scheduled trailer coverage: Covers trailers that are (1) scheduled on the policy and (2) that are owned by the business. The limits of coverage is normally stipulated on the policy.
  • Physical damage coverage on own trucks, if needed.
  • General liability for the trucking business. Most larger business will be required by their clients to have that. This coverage starts at about $1,000 per year but can go up for larger business (ie more than 9 trucks).
  • Workers compensation: Needed by law. In Illinois the owner operators who work under independent contractor may not qualify by some insurance companies for exemption as 'independent contractors' unless they show proof of having their own workers comp. So if you have an independent contractor owner operator with total payment of $80,000 in a year, you might get a big bill from your workers comp carrier to pay for workers compensation on that case, unless that owner operator can demonstrate that he has workers comp om his/her won.
  • Occupational Accident: An alternative coverage to workers comp but is not the same. Limited amounts offered for income and medical expense in case of work related injuries of your drivers.

Does Your Business Need Trailer Interchange Insurance?

Trailer interchange insurance is necessary for any business or individuals in the trucking or  transportation industry as it will provide protection to the interests of both the trucking/ transpiration company, as well as the parties who they commonly do business with. Other third parties will require to see a certificate of insurance with trailer interchange coverage stated on it, just before them allowing you to haul their loads or trailers.

The value of the trailer, not the merchandise hauled or goods loaded in the trailer, are the main determinants of the limits and the rate of the coverage. The most frequent amount of coverage for trailer interchange insurance in Chicago is $25,000.00, with a price ranging between $650 to $900 on yearly basis, with a deductible of $1,000 per claim. If you come to hauling a more valuable trailer, your client may ask you to increase that coverage. Your insurance agent may do that for you quickly with an endorsement to your contract.


Owner Operators Do Not Need Trailer Interchange

Trailer interchange insurance regularly comes with just about all primary insurance policies where MC filing is needed. If that trucking business seeking primary insurance does use their own trailers along with the leased ones, they need extra coverage to cover their own shown trailers, because trailer interchange does not offer coverage to owned trailer. Owner operators, or truckers who lease their own tractor trucks to trucking companies do not need this coverage (their leasing companies will furnish it to them when the owner operators are under dispatch.)
 
Maintaining the proper insurance is always a highly recommended investment for any business in any sector. Sometimes it is a legal condition! With the merits of quality trailer interchange insurance, a trucking business owner can feel guaranteed that their best interests are protected as they use trucks and owner operators to transport the goods of their clientele. Knowing how this type of insurance works, assists a business owner in distinguishing the significance linked with having or not having the proper type of this insurance.
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