Contingent Liability
Contingent liability insurance is a type of insurance designed to protect shipping companies that use contract employees. If your trucking business actively uses independent drivers, you will need this type of protection if one of your contract drivers is injured and tries to file a worker's comp claim against your company.
How Can An Independent Driver File A Claim Against A Contract Company?
Companies are not required to carry worker's compensation on independent contractors or freelance employees. However, if an independent contractor "believes" that they are an employee or can show that they only generate income from one company, they can be classified as an employee.
If your trucking company faces this type of problem, you may find yourself facing large medical bills, payments for lost wages and other losses suffered by the "employee" if they file a claim and you are not insured.
The Difference Between An Independent Driver And A Company Driver
An independent truck driver is someone who:
Has a business license
Operates their own vehicle and uses their own tools
Shows profits and losses on their taxes
Sets their own schedule
In most cases, it is very easy to distinguish an independent driver from a company driver. However, it is the scheduling part that can become tricky.
Suppose your company hires an independent driver to operate on a dedicated route daily, meet delivery times, and return to the warehouse by a specific time each day. In that case, they can claim they are an employee because they do not set their own schedule.
How often does this happen? More than you may think. Recently, hundreds of independent drivers sued a national delivery company claiming they were employees because of dedicated routes and stops, and they won the case.
Suppose your trucking company is sued for worker's compensation or other employee benefits from an independent driver. In that case, you could face large legal bills and be forced to compensate the driver.
Is Contingent Liability Insurance Mandatory?
Contingent liability insurance is not mandatory insurance for any trucking business. This policy is available for trucking companies that use independent drivers to move freight as an added protection.
Accidents can happen, and drivers can get injured. Protecting your company if the driver seeks compensation for their injuries makes sense.
Truckers Insured Offers Many Trucking Industry Insurance Policies
The trucking industry is unique regarding the types of insurance coverage independent drivers and trucking companies need.
If you are looking for a contingent liability insurance policy or any type of insurance product to operate your business, Truckers Insured can help. Our company works with multiple insurance companies so that we can find you the right insurance coverage at the right price for your company.
Truckers Insured offers more than just trucking insurance products to our clients. We have made it easy for our trucking industry clients to also find the right business, personal, and employee benefit insurance products. Our full spectrum of insurance products and exceptional customer service is what keeps our clients satisfied.