How do you make your trucking policy attractive to owner‑operators?

Hey guys, I'm Hunter with Nelson Insurance. I'm gonna talk about adding owner operators to you guys' policy here today, what that looks like for insurance, but also how you guys can use insurance to leverage bringing your own operators on. Um, because obviously the more owner operators you can bring on, the quicker you guys grow and the more money you guys can make, to an extent, unless you obviously do it negligently. So, uh, all we do is trucking insurance based out of Sioux Falls, South Dakota. Let's get into it. All right, so the first thing when you guys are adding owner operators to your insurance is just understanding how that works, right? So if you guys have an authority, federal filings, you guys have an active MC, you guys are going to have what's called the MCS-90, which means all owned and operated trucks have to be on your auto liability policy. This applies for a champion with an authority. So same thing goes with owner operators. So if they have their own truck and you do not own it, you're still going to add it to your auto liability policy because essentially auto liability is going to follow the MC number. And so they're going to be on your guys' auto liability policy, and that is only going to cover them while they are, uh, based on the bill of lading or in transit, um, hauling a load right now. They are also going to be on your guys' cargo policy as well. You guys' cargo policy is kind of related to the bill of lading. You guys' name is going to be on there. And so they're going to be on your— they're going to be on your guys' cargo policy as well. And then what they are going to do to make sure that they're protected is since they own the truck almost all the time, they are going to carry the physical damage on the truck and they're going to get bobtail insurance. So that time when they're not hauling, they're running bobtail. They are going to have bobtail insurance or non-trucking liability, which is very, very cheap for them. Bobtail insurance or non-trucking liability might run $40, $50 a month. Uh, physical damage might be a 5% rate, so 5% of the total insured value. So the truck, let's say it's $100,000, might be $5,000 for them. And you'll call it $500 for the bobtail or non-trucking liability, so $5,500 out of their pocket. And then typically you're looking at like $1,100 per truck on the cargo, that's a year. And then whatever your guys' liability rate is, that could fluctuate anywhere from $5,000 to $25,000, right? So it's got a lot of variation there. And how can you guys use this to now leverage owner-operators coming under your guys' insurance? For one, you guys gotta make sure you guys got a pay structure in place. I mean, you're gonna be paying insurance for them. You guys can just take out of their, um, out of their check. You guys can just charge a little bit higher percentage, whatever you guys do there. I've seen multiple different ways. Someone charge 20%, not bill them for insurance. Someone charge 15%, maybe a little bit less, then bill them for insurance. Because ultimately, uh, you know, what they cost for insurance is going to kind of vary based off of them. If they get a horrible record versus a really good record, it's kind of tough to go in there and not bill them for insurance because it could be double or half depending on the owner-operator. Now with the bobtail insurance, a lot of these guys are just going to go to Progressive, and Progressive is not those rates I was just talking about with the 5% of the $500 a year for bobtail. They are not those rates. I've heard of people paying $20,000 for bobtail insurance. Mind-blowing. Should not be doing that. And also, just specifying, do not let them get auto liability. That's not even a choice. It's not like this is a recommendation. They cannot get auto liability. Do not let them get auto liability. They need bobtail and physical damage if they want to protect their truck. But what I'm getting at is non-trucking liability and bobtail insurance can be very expensive. Going to Progressive or GEICO, it is not recommended. Almost never will they be the cheapest unless they're brand new CDO. What you guys as the authority holder are going to want to do is get a what's called master policy. And this master policy, you can really kind of deck out to as much as you want. When you guys have a master policy through a company like Great American, 10-4, uh, Zurich, etc., etc., we have a lot of those options there. You guys can get those set rates and they can be a little bit cheaper even by having what's master policy with multiple different people on it. And you guys know those— you guys know the coverages on there. There's a broker, there's an underwriter, and everything is going to be set and it's going to be much, much, much more competitive. The other big advantage of doing this besides it just being cheaper. And so if you guys can have your own insurance and master policy that is half the price of another authority holder or motor carrier, offering them to lease onto their authority is, um, so you guys would be half the price, which would save a lot of money, which would bring leverage for them to lease on to you guys instead of somebody else because you have a master policy. But on top of that, for you guys, for benefit, you guys get to track and make sure that everybody actually has bobtail insurance, because if they do not have bobtail insurance, this could come back on you. And so it is a big deal to make sure you guys are tracking that. And by having them on your insurance, you'll be able to see that and make sure everything is set and good to go. Now, what else can you guys do besides yourself— by— besides just saving the money by having a program for insurance? Uh, the other thing is, is these owner-operators are 1099s. They're out there providing for their families. They don't have any benefits whatsoever, pretty much. Now you guys can go out there and get group life plans. You guys can get group, uh, occupational accident plans, which is really the most common. Uh, you guys can really do whatever the heck you want. You really can't throw them on your guys' health insurance and pay for that or anything on those lines, but the most common benefit there is going to be occupational accident. What occupational accident is, is it's an accident policy for work on the job. So if they have a family, they get hurt in the truck, occupational accident can go out there, provide coverage for these guys. Now, why would I bring up an accident policy for the motor carrier to think about? When you guys are doing this, you guys can also throw in the master policy. You guys get this big bundle. You're saving them money, providing more coverage, provide some reassurance for the family. And so the wives and the, and the mothers are going to step in here and help make the decision with the, Typically it's the father who's the trucker. Now it could be vice versa as well, but they're going to want to make sure that their family is protected. And so having an occupational accident policy provides more coverage, make sure their family is good to go. And so that way, if they— he does get into an accident, gets hurt, you guys don't lose your owner-operator, their family's protected. These guys aren't struggling for money every day, and you guys are just going to have a more consistent, better operation. Caring, caring about the drivers that you guys have going for you. And so that's one option there, um, and it keeps everything cut dry and simple. So there's not really a whole lot more to that. There's a lot more, um, that you guys can add to these master policies, but a lot of people don't offer them. I think they are a huge deal. You can add a lot of benefits to these master policies or just get group benefit plans going, but you're saving costs, you're tracking compliance much easier, and now you've got some real leverage to bring on owner-operators. So that's how insurance works with these owner-operators and how you guys can bring them on. If you guys have any questions, feel free to reach out. We've got Zurich who's got fleet master policy programs. I've got master policy programs available for 2 owner-operators. So whatever you guys like to do, and you're interested in it, please let us know. Again, I am Hunter Nelson Insurance. All we do is trucking. We're based out of Sioux Falls, South Dakota. Please like, subscribe so I keep making content like this. Thanks.