Insurance is a trucking company’s backbone. You cannot roll without it. The FMCSA requires proof of liability insurance for your Operating Authority/MC Number application. Most shippers require proof of insurance before they will trust your company with their freight. As long as your insurance is in place, you have a working trucking company.
Insurance is one of the most expensive purchases for a trucking company. The premiums require a large amount of upfront cash and the monthly payments can be in the thousands. So why do you need something that is going to cut into your profits? Protection. Insurance protects not only your business but your customers’ as well.
When a customer gives you freight to haul, they are trusting you with their business. Your customer needs that freight to reach its final destination in pristine condition because that freight represents their profits. Damaged freight could put your customer out of business. Having insurance shows your customers that you are able to protect their interests in case of an accident. It also protects yours since you will not have to pay for total damage costs out of pocket.
Insurance takes a great deal of planning. Most insurance companies will not issue you a policy until you have had your CDL for at least 2 years. If you do find an insurance company that will take a risk on you sooner, the premium will probably be very high. This is where a premium financing company, such as TAFS Premium Finance, comes in handy. Most insurance policies want you to pay a premium that is 25% to 30% of the total policy cost. TAFS Premium Finance can lower this initial percentage. Additionally, TAFS Premium Finance can help take the stress out of meeting your monthly payments.
A best practice for making your insurance payment is to set aside a portion of money from each invoice you receive. Doing this yourself can be stressful. Did you set aside enough money? When is the payment do? Stop babysitting your insurance. Use TAFS Premium Finance. TAFS Premium Finance saves the money for you by placing a portion of your factored invoices in to escrow account and ensures your payments are made on time. No more worrying about missing payments or risking policy cancellations. TAFS Premium Finance has you covered.
Insurance is a big part of the trucking industry. It not only protects your company but your customers’ companies as well. As long as you have a good policy in place and continue to make your payments, you have the ability to keep rolling.