What’s the Deal with Trucking Workers’ Comp Insurance?

Trucking is one of the top ten most dangerous professions in the U.S., and for that reason alone, it's important for drivers and the companies they work for to have robust workers' compensation insurance policies. Common injuries in the field include falls, highway accidents, and back injuries incurred during the loading and unloading of freight.

If you're in the trucking industry but aren't sure about the ins and outs of workers' comp, we'll break it down below so you know how to protect your company and your drivers in the event of an injury.

Trucking Workers' Comp 101

Let's start with the basics. Workers' compensation insurance is required by businesses both large and small in every state except Texas—and even there, it is strongly encouraged. State laws differ on the particulars, but in general, if you are a business owner and have employees, you will need to purchase workers' comp insurance.

Why? Because workers comp coverage protects both you and your workers. First off, it shields business owners from lawsuits since, in most cases, they can't be sued for a work-related injury if they have this insurance. A single high-cost lawsuit could be disastrous for a trucking company, especially a smaller one, so this is a real and tangible benefit.

And here's what it'll do if an employee is injured:

• Pay medical bills: With a valid claim, an injured employee's medical costs should be paid by the insurer. This may include ambulance costs, medical equipment, hospitalizations, and nursing care. It may include future costs like physical therapy as well.
• Cover lost wages temporarily...: If a covered employee has lost work because of their injuries for more than a certain number of days, determined by state regulations, they will receive a portion of their salary while they are recovering. The portion varies from state to state. In Texas, for example, the amount is 70 to 75 percent of their average salary. The payments may be full or partial, depending on the employee's ability to do any work while recovering.
• ...and permanently: After a certain amount of time, the employee may be determined to have reached maximum medical improvement, or MMI. This means the medical professionals believe the employee will not have any further improvements from their injury. At that point, the employee needs to switch to permanent disability—which covers lost wages indefinitely. This amount can be either full or partial. A partial payment would occur if the employee was able to return to work, but not able to earn as much as they did prior to the injury. Full payments would happen if the injury left the employee unable to work in any capacity.
• Death benefits: If an employee is killed in a work-related accident, workers' comp should cover their funeral expenses and provide a payment to beneficiaries such as children under the age of 18 or a spouse.

Won't Commercial Auto Insurance Take Care of Driver Injuries?

Commercial auto insurance won't protect your drivers if they get hurt while driving for you. It only covers damage to the actual truck and injuries or damage to third parties. Of course, like most insurance, this is only if your driver is at fault. If another car hits your driver, they're liable and their auto insurance will pay for your driver's injuries.

In other words, your drivers need workers' comp while they're on the job. Your insurance agent can review your options and help you choose the right coverage for your business situation.

Workers' Comp for Owner-Operators

But what about owner-operators? If you are an independent contractor who works with multiple clients or companies or leases their truck out for short- or long-term hauls and don't have employees, is workers' comp still required? It may not be legally mandated, depending on your state of license. Sole proprietors and others who work with a range of clients and own their trucks are generally not required to carry workers' compensation coverage.

But that doesn't mean you don't need insurance coverage if you own your truck. In most states, the companies you work with are not required to extend their workers' comp coverage to you unless you are an employee. If you have a workplace injury and you're not an employee, you cannot make a workers' compensation claim through the company's policy.

The bottom line is that as an independent owner-operator, you still need to protect yourself with insurance coverage. One policy type designed for independent truckers is occupational accident injury insurance, which provides medical and disability coverage that is similar to workers' comp. 

The best way to determine if a policy is right for you is to find an insurance company with knowledgeable insurance brokers who can answer your questions and recommend the appropriate type of trucking insurance for your needs.

How Much is Trucking Insurance?

Trucking workers' comp insurance costs about $9-10 for every $100 of payroll. However, the total amount you pay will vary based on a number of factors, including:

• The number of employees you have
• The amount of your payroll
• The state you are registered in
• The insurance company you choose
• The class code of your company and the type of trucking that you do
• Hauling distances
• Your insurance history—for example, whether your drivers have filed multiple claims in the past

Your insurer will take these and other factors into account when determining your final premium. 

What is the Class Code for Trucking?

Whether you are an owner-operator or the business owner of a trucking company, you'll need to know your class code when you are searching for insurance. Class codes, or classification codes, are numbers that are assigned to a broad range of business types. When used for workers' comp purposes, the class code tells an insurer what sort of risks they're taking on when they agree to provide insurance for a business.

This is important because insurers are in the business of assessing risk, and the coverage premiums for a small business will be determined by just how risky the business is. So, for example, a tree removal company, where employees work high in the air to cut down trees, is considered more at risk for claims than, say, a company of accountants, where it's unlikely that an employee will sustain a serious injury.

Organizations such as the National Council on Compensation Insurance (NCCI) assign workers' compensation class codes, and there are more than 800 of these codes. Several of them apply to trucking, including the following:

• Class code 7219: General trucking, for truckers who transport general merchandise and materials. This can include dump truck operators, snow removal, and gravel haulers. This is the most common class designation for the trucking industry.
• Class code 7230: Package delivery, for couriers and others who deliver packages from a retail store to customers.
• Class code 7231: This category applies to mail and parcel delivery services, such as UPS, FedEx, and Amazon.
• Class code 7380: Drivers and messengers and even bicycle couriers fit in this category.
• Class code 7232: All trucking done for the US Postal Service, both in-state and between states, is allocated to this code.

Why are there so many different class codes for trucking? Mainly because data has shown that different types of trucking carry different levels of risk, and drivers who are less likely to have injuries—such as, for example, your local mail person—will carry lower premium costs than truckers who load and unload equipment and who are engaged in more dangerous aspects of the industry.

What Are the Most Common Workers' Compensation Claims for Truckers?

Occupational accidents take many forms, leading to a range of comp claims that may include disability payments, lost wage replacement, and more. The most common types of injuries that long-haul trucking operators face include the following:

• Accidents: It goes without saying that highway accidents are a common cause of injuries. Although truck accidents can be disastrous for smaller vehicles, truck drivers may not escape injury themselves following an accident. In 2020 alone, 608 large truck occupants were killed in accidents, with many more accidents causing serious injury.
• Warehouse or work site injuries: Drivers can also be injured or killed when not in their trucks. Many drivers are responsible for loading and unloading their vehicles at the beginning and end of their journeys. There, they may face the possibility of injury from forklifts, cranes, or other moving equipment, whether through malfunction or operator error. Injuries can also be caused by damaged or slippery surfaces or other dangerous conditions.
• Loading injuries: Of course, the motions involved in moving loads can cause injury as well, often to the neck, back, or shoulders. Clients may want their freight moved quickly, leading to further opportunities for over-exertion and injury.
• Lifestyle injuries: Dangerous though it can be to repeatedly load and unload trucks, the time they spend behind the wheel can also be hard on drivers. Long hours seated in a vibrating vehicle may lead to repetitive strain injuries to the back and neck. Lack of regular movement leaves drivers more prone to obesity, which can lead to diabetes, stroke, or heart attacks.

Any of these or other types of injury may impact the life of a trucker significantly, which is why it is important to work with a reputable insurance agency that can help by underwriting a comp policy that will adequately provide protection for medical expenses and more when needed.

More and more truckers and transportation business owners are looking for online solutions for their insurance needs with companies such as Hourly. Hourly offers a simple and easy interface for seeing all your labor costs, including payroll, taxes and workers' comp–and even connects right to your workers' comp so premiums are always based on exact numbers. 

Understanding Workers' Comp Will Help You Avoid Injury Pitfalls

Whether you are a trucking business owner or an owner-operator, understanding how workers' comp insurance works is an important part of doing business. 

If you still have questions or are not sure if you need it—or if you need another type of policy, such as occupational accident insurance—it may be time to contact a licensed insurance broker or agent to discuss your situation and get that ever-important insurance coverage.