Workers compensation (Workers Comp) coverage is crucial for trucking companies that employ truck drivers. Here's why it's essential and how to manage its costs effectively:

Coverage Details:

  • Workers comp covers truck drivers if they are injured while working for the company.

  • Common injuries for truck drivers include those sustained in accidents, while loading or unloading freight, making roadside repairs, or slip and fall incidents.

  • It's also known as Workman’s compensation, although the term "workers compensation" is now more inclusive due to the increasing number of female truckers in the industry.

Importance of Workers Comp:

  • Injuries sustained by employees can lead to significant financial liabilities for employers.

  • Not having workers comp coverage can result in severe penalties, including shutdowns of trucking operations.

  • State laws vary, but if you have employees, you're generally required to have workers comp coverage.

Factors Affecting Costs:

  • Rates depend on factors such as the number of drivers, their salaries, whether they load/unload freight, haul hazardous materials, state of operation, operation class code, prior claims, radius of operation, years of experience, and the insurance company.

  • Rates typically range from 8% to 15% of the driver's salary, with variations based on the factors mentioned above.

Cost Examples:

  • For a trucking company with four drivers earning $52,000 per year each, the annual workers comp premiums could range from $16,640 to $31,200, depending on various factors and location.

  • Costs can vary significantly between states and based on the trucking operation's specifics.

Owner Operators and Workers Comp:

  • Owner-operators with no employees may not need workers comp coverage, but they may opt for Occupational Accident Insurance.

  • Owner-operators leased onto a Motor Carrier may need to consider the carrier's requirements for coverage.

Class Codes and Risk Mitigation:

  • Workers comp rates are influenced by the classification of the trucking operation.

  • Implementing safety measures and accident prevention strategies can help lower the risk of accidents and subsequent workers comp claims.

Premium Reduction Strategies:

  • Shopping around for quotes from knowledgeable agents can help lower annual premiums.

  • Implementing safety measures and accident prevention programs can reduce the frequency and severity of claims, thereby lowering insurance costs.

Conclusion: Workers compensation coverage is essential for trucking companies with employees to protect against liabilities arising from on-the-job injuries. Understanding the factors affecting premiums and implementing risk mitigation strategies can help manage workers comp costs effectively. Working with knowledgeable agents and insurers can ensure that trucking companies obtain adequate coverage at competitive rates.

Workers Compensation Codes for Transportation Companies:

A big part of the rate you will pay for WC is how your operation is classified. The insurance companies use the following class codes. Make sure you are classified correctly!

  • 7219 – Local and Long Haul Truckers Workers Comp – In the past, see below, the truckers were classified based on radius. No longer! 7219 is a catchall for all most types of truckers.

  • 7228 – Local / Short Haul Trucking Workers Comp – (Old Code) If you haul goods for other people and travel less than 200 miles, then this is most likely going to be your code. Drive away operations, dump trucks, towing operations can also fall under this code.

  • 7229 – Long Haul Trucking Workers Comp – (Old Code) If you haul goods for other people (for-hire) and travel over 200 miles from your garaging location, then this is most likely going to be your code. Interstate trucking workers comp is almost always this code. Long distance drive away operations would also be here.

  • 7230 – Trucking: Package or Parcel / Delivery Drivers Workers Comp – This class covers most operations that deliver goods from retail stores directly to consumers. These are company owned goods. Think furniture stores.

  • 7231 – Mail Deliver and Couriers Workers Comp

These are just a few examples, Oilfield trucking workers comp is 7222, for instance. There’s a lot more. The NCCI has 1000s of codes! The key is to make sure you are not misclassified and to get a few quotes.