As a carrier, keeping your drivers busy and ensuring their safety—along with the safety of other carriers, cyclists, and pedestrians—is a top priority. However, accidents can still happen. These incidents may range from minor issues, like a bent fender, to serious collisions causing extensive property damage, life-altering injuries, or even loss of life. In such situations, you could face significant financial liabilities, potentially large enough to threaten your business.
For those in the trucking industry, insurance isn’t just important—it’s essential. Certain types, like auto liability insurance, are mandatory for all carriers. Equally critical is bodily injury liability insurance. This guide will define bodily injury liability insurance, highlight the distinction between bodily injury and property damage liability, and answer important questions such as, “How much bodily injury liability insurance do I need?”
What is bodily injury liability insurance?
Bodily injury liability insurance is a form of coverage that helps pay for medical bills, income loss, and other expenses for third parties involved in accidents where you or your company are found responsible. Required in most states, bodily injury liability insurance can also assist with legal defense expenses if you’re sued for damages related to these injuries.
People often lump bodily injury and property damage liability together because they’re both types of liability insurance, but they serve different purposes. While property damage liability helps cover expenses for others’ physical property damaged in accidents where you’re liable, bodily injury liability insurance focuses on people. It provides coverage for medical bills, income losses, and legal defense costs if someone sues over injuries. Both bodily injury and property damage liability are essential for carriers, but bodily injury liability insurance specifically protects against the costs associated with injuries to individuals.
What does bodily injury liability cover?
Let’s dive into precisely what bodily injury coverage includes. With a solid bodily injury liability coverage plan, you can trust your insurance company to help cover the following:
- Medical expenses: Even a simple trip to the hospital can be pricey, much less one following an accident with a large truck. Your bodily injury insurance provider can cover impacted parties’ hospital fees, emergency care services, ongoing care costs, follow-up visits, and even equipment costs like crutches or wheelchairs.
- Loss of income: Accidents can seriously impact injured parties’ ability to work. Whether they need to take time off work to attend physical rehabilitation sessions or can’t return to work at all because they worked in a physically demanding environment, injured parties are often entitled to receive compensation. That’s where bodily injury liability insurance can kick in and save you some money.
- Funeral costs: If the worst should occur and someone is fatally injured due to an accident you or one of your drivers caused, your bodily injury liability coverage can help pay for the victim’s funeral costs.
- Pain and suffering: One accident that takes place in seconds can cause a lot of ongoing pain, suffering, and emotional stress—and injured parties often seek payment for their experiences. Here, too, bodily injury liability insurance can help cover costs.
- Legal fees and legal counsel: Should the injured party file a lawsuit against you, your bodily injury liability insurance plan may cover some or all of your legal defense fees and court costs.
How does bodily injury liability work?
A bodily injury liability insurance plan has two different bodily injury limits: a per-person limit and a per-accident limit. These bodily injury limits are the absolute maximum your insurance provider would pay for a covered bodily injury claim.
The per-person limit is the maximum amount your insurance company would pay per person injured in the accident. However, this tops out at the per-accident limit. For example, if you purchase a bodily injury insurance policy with $100k per-person and $400k per-accident bodily injury limits but six people were injured in the accident, your insurance provider would pay up to $400k for their combined medical expenses.
It’s also worth noting that you don’t have to purchase bodily injury liability insurance policies separately. Many general liability insurance policies include bodily injury insurance and are just as effective as separate insurance. Just note that they function a little differently.
You can purchase a combined single-limit policy, which gives you a certain amount of coverage that is divided between bodily injury and property damage depending on the accident, or a split-limit policy. With this policy, your insurance provider has a predetermined amount it will pay for each type of coverage.
For example, you might come across a 25,000/50,000/20,000 split-limit policy. This means your insurer will pay up to $25,000 in injury expenses per person with a $50,000 per-accident limit and a $20,000 property damage limit. You can pay for higher limits or even purchase umbrella insurance for additional protection. This may not be available in all states, so make sure to check your policy for full details.
How much bodily injury liability insurance do carriers need?
Determining how much bodily injury liability coverage you need depends on various factors, including state-specific minimum requirements. Many states set their own liability coverage thresholds, but if your bodily injury liability is part of a broader insurance plan (often the simplest and most effective option), you’ll need to meet the FMCSA minimum coverage of $750,000 at a minimum.
Keep in mind that this is the absolute minimum bodily injury liability coverage you’ll need. In many cases, it makes sense to purchase even more bodily injury liability insurance to ensure you and your assets are well protected. In fact, when it comes to insurance for trucking companies, it’s generally recommended that you get at least $1,000,000 in coverage.
If your state doesn’t have any bodily injury insurance requirements or it allows self-insurance, you’ll still want to have bodily injury coverage. Without it, you’ll be liable for any medical bills, legal fees, funeral costs, income loss, and pain and suffering, which could financially devastate you and your carrier business.
How much does bodily injury liability coverage cost?
The cost of bodily injury liability coverage varies widely and depends on several factors specific to your carrier business. Insurance companies use different methods to calculate rates, considering variables like your location, driving history, and the amount of coverage you require. These factors mean there’s no universal answer to how much you’ll pay for this coverage.
That said, certain factors are guaranteed to increase costs regardless of where you operate. Purchasing coverage above your state’s minimum requirements will result in higher premiums. Additionally, recent accidents or traffic violations can lead to increased rates across the board.
Factors that affect bodily injury liability insurance costs
When calculating bodily injury liability insurance premiums, insurers consider several key factors that influence the overall cost of coverage. Here are some of the primary elements that can impact what you’ll pay:
- Driving record: Accidents, traffic violations, or past claims can lead to higher premiums.
- Location: Areas with higher accident rates or stricter state requirements can increase insurance costs.
- Vehicle type: Larger, heavier vehicles or those with high repair costs typically result in higher liability premiums.
- Coverage limits: Opting for higher coverage limits provides greater protection but usually comes with a higher cost.
- Claims history: A history of frequent claims can signal risk to insurers, leading to increased premiums.
- Driver experience: Less experienced drivers often lead to higher insurance costs due to their increased accident risk.
- Business size: Larger fleets may see different rates depending on the number of vehicles and drivers covered.
Securing your business with bodily injury liability coverage
Bodily injury liability insurance is essential for carriers, providing critical financial protection in the event of accidents that result in injuries to others. It helps cover medical expenses, legal fees, and other costs that could otherwise place a significant financial burden on your business. Ensuring that you have the right coverage not only meets legal requirements but also supports long-term business stability.
Gain peace of mind and coverage with Marquee Insurance Group
With countless insurance providers available to carriers, Marquee Insurance Group (MIG), DAT’s commercial insurance partner, stands out as a trusted leader. MIG connects carriers to a wide range of coverage options, including commercial auto liability, motor cargo insurance, physical damage, per-shipment cargo, and excess umbrella insurance. Their general liability policies can also include bodily injury liability, property damage liability, and personal injury and advertising injury liability.
Reach out today to learn how MIG can connect you with the right insurance solutions for your business.
