Risky Business
The Most Misunderstood Coverage in Owner Operator Truck Insurance - NTL
Here’s a quick overview of NTL, and heads up on a denied claim where a personal auto policy was used in it's place:
A Non-Trucking Liability policy or "NTL" is designed for an Independent Contractor/Owner Operator who is under permanent lease by contract to a Motor Carrier. The Motor Carrier provides your Primary Commercial Auto insurance on your unit for the times when you’re “operating on his behalf”.
All NTL policies out there are very, very similar in their language regarding when coverage kicks in and what contracts must be in place. It is not "Unladen" or "Laden" or "Bobtail". (Whole other blog.)
It’s important to know up front that NTL will not pay a claim if you do not have an active contract in place with a Motor Carrier where they provide your Primary Commercial Auto Liability. So if you leave a Motor Carrier, don’t driver around on your NTL policy without talking to your agent.
It's likely you already know that NTL doesn’t provide liability coverage for business use or when hauling any type of cargo. Your NTL also doesn’t provide liability coverage when driving to and from the terminal, fueling up, traveling for maintenance, vehicle servicing, driving during layovers, dead-heading and washing your truck.
Those activities are all considered using the vehicle for business purposes or "on behalf of the Motor Carrier" so claims occuring at that time are typically covered under your Motor Carrier’s Primary Commercial Auto Insurance policy, not your NTL policy.
Given that description, it’s understandable that an Independent Contractor with an under 10K GVW unit can be tempted to maintain a personal auto policy instead of a commercial NTL policy.
I’m bringing this to your attention because I’m told there is currently a personal auto insurance company rejecting a cargo van claim for misrepresentation of risk. Apparently the guy said that he was using the cargo van to drive to and from work as in “business use” and he’s actually an Independent Contractor/Owner Operator hauling local and regional freight on behalf of a Motor Carrier.
It’s my understanding that the personal auto policy did not have the Motor Carrier listed as Additional Insured, so there is no defense for the Motor Carrier as they are drawn into the claim.
Look, this really isn’t any different than a pizza delivery or Uber type rejected claim, but it serves as a reminder to purchase the policy that matches what you do if you don’t want any problems with your insurance.
Shelly Benisch, TRS, CIC
Commercial Insurance Solutions Inc. (CIS)