Whether you lease your equipment and operate under a motor carrier’s authority or own your truck and run under your own, knowing where your coverage begins and ends is essential.
Lease operators typically operate under the insurance program of the motor carrier. While the carrier often provides primary liability coverage, the lease agreement outlines who is responsible for each policy and how claims are handled. Independent operators, by contrast, carry their own authority and are fully responsible for their insurance, compliance, and risk management decisions.
At Joe Morten & Son, Inc., we work with both types of operators to help clarify coverage obligations and prevent gaps that can lead to financial exposure.
Core Insurance Coverages and Responsibilities
Auto Liability:
Lease operators may be covered under the carrier’s policy, but it’s essential to review contracts carefully to confirm terms and limits. Independent operators must carry their own auto liability coverage to meet FMCSA requirements.
Physical Damage:
Leased equipment often requires minimum coverage levels, while owner-operators are responsible for securing their own physical damage protection. Learn more about physical damage coverage and how it safeguards your investment.
Cargo Coverage:
Both operating models require cargo insurance, though coverage limits and responsibilities depend on carrier contracts and load types.
Non-Trucking Use (NTU) Liability:
For lease operators, Non-Trucking Use Liability (sometimes called bobtail coverage) is vital when operating off dispatch. It provides protection when the carrier’s liability policy no longer applies.
Avoiding Coverage Gaps
The most common issue for both lease and independent operators is misunderstanding who is responsible for which coverage. A carrier policy might not apply when the truck is used for personal errands, and a driver’s personal policy won’t cover a commercial operation. The result is often uncovered losses that could have been prevented with clear coordination.
Reviewing lease agreements carefully and consulting an experienced insurance provider helps identify these gaps before they lead to disputes or denials. Our team routinely helps operators align their policies with contract terms to maintain complete protection.
What Affects Premiums
Premiums are influenced by many factors, including safety records, claims history, equipment age, cargo type, and driving routes. A strong maintenance program and proactive safety practices both contribute to lower premiums over time. Operators who invest in safety training and documentation often see those efforts reflected in their insurance costs.
Taking a Proactive Approach
Lease operators can strengthen their coverage positions by maintaining supplemental policies and participating in carrier safety programs. Independent operators benefit from regular policy reviews, equipment upkeep, and engagement with available risk management resources.
Joe Morten & Son offers risk control services that help drivers and fleets build safer, more resilient operations. These resources are designed to reduce exposure and improve compliance through practical, on-the-road solutions.
Key Takeaways for Owner-Operators
Whether you’re leased to a carrier or operate independently, the goal is the same: to stay protected and keep your business running. Understanding your insurance responsibilities and working with an experienced partner who knows trucking helps ensure that when an incident happens, you’re covered from every angle.
If you’d like to review your current coverage or explore new options, request a free consultation with Joe Morten & Son, Inc. today.
This material is intended to be a broad overview of the subject matter and is provided for informational purposes only. Joe Morten & Son, Inc. does not provide legal advice to its insureds or other parties, nor does it advise insureds or other parties on employment-related issues, therefore the subject matter is not intended to serve as legal or employment advice for any issue(s) that may arise in the operations of its insureds or other parties. Legal advice should always be sought from legal counsel. Joe Morten & Son, Inc. shall have neither liability nor responsibility to any person or entity with respect to any loss, action, or inaction alleged to be caused directly or indirectly as a result of the information contained herein. Reprinted with permission from Great West Casualty Company.