This is a list of terms designed to assist you while exploring commercial trucking insurance. It is not meant to be all-inclusive, but should help with your understanding of common terms.
A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
A
Air Cargo
Freight that is moved via air transportation.
Auto Collision Coverage
Optional auto insurance which pays for damage to your car caused by collision with another car or object, or by rolling the car over. Frequently required if you have a car loan.
Auto Comprehensive Physical Damage Coverage
Optional auto insurance which pays for damage to your auto caused by things other than collision or rolling the car over, such as fire, theft, vandalism, flood, or hail. Frequently required if you have a car loan.
Auto Liability (AL)
Insurance that protects an insured from claims arising from injury or damage to others in the event of an accident.
B
Bill of Lading (BOL)
A transportation document that serves as the contract of carriage along with other conditions between a shipper and a transportation provider.
Bobtail Insurance
Owner-operator insurance specifically for the tractor, typically required under a lease agreement.
Bonded Warehouse
A warehouse approved by the U.S. Treasury Department and under bond for observance of revenue laws, used to store goods until duties are paid and goods are properly released.
Break-Bulk
The separation of a consolidated load into multiple smaller shipments.
C
Cargo Insurance
A commercial trucking insurance policy designed to cover cargo during transit. Verify exclusions when purchasing a policy.
Carrier Liability
A common carrier or trucking company is liable for shipment loss, damage, and delay, except for certain exceptions (e.g., act of God, public authority, or shipper fault).
Carrier
A company in the business of transporting products or people by land, sea, or air.
Chassis
Specialized equipment used to carry an intermodal container.
Collision Insurance
Protection against loss resulting from any damage to the policyholder’s car caused by collision with another vehicle or object, or by upset of the insured car, whether it was the insured’s fault or not.
Common Authority
Trucking companies providing for-hire truck transportation to the general public.
Comprehensive Auto Insurance
Protection against loss resulting from damage to the insured auto, other than loss by collision or upset.
Compulsory Auto Liability Insurance
Insurance laws in some states required motorists to carry at least certain minimum auto coverages. This is called “compulsory” insurance.
Contract Authority
Trucking companies providing for-hire truck transportation to specific shippers under contract.
Consolidation
Combining multiple shipments to lower transportation costs.
Container on Flatcar (COFC)
A container loaded onto a flat railcar for transportation.
Container
A shipping container commonly used for ocean and rail transportation; standard sizes include 20’ and 40’.
Contingent Cargo Insurance
A policy held by brokers that pays if the primary cargo policy fails. Rarely used.
Cost, Insurance, Freight (CIF)
A freight forwarding term where the seller covers freight charges and marine insurance on ocean shipments.
Courier
A trucking company specializing in high-value products and expedited deliveries.
Customs Broker
A company handling customs processes for import/export freight.
D
Distribution
The movement of goods through a warehouse to final delivery.
Door-to-Door
Transportation from origin to final destination.
Door-to-Port
Transportation from origin to the port of entry.
Drayage Carrier
Trucking company that moves containers short distances, typically to/from ports or rail yards.
Dry Van
An enclosed freight trailer, typically 48’ or 53’ in length.
E
Distribution
The movement of goods through a warehouse to final delivery.
Door-to-Door
Transportation from origin to final destination.
Door-to-Port
Transportation from origin to the port of entry.
Drayage Carrier
Trucking company that moves containers short distances, typically to/from ports or rail yards.
Dry Van
An enclosed freight trailer, typically 48’ or 53’ in length.
F
Flatbed
An open trailer used to haul large or bulky freight.
FMCSA
Federal Motor Carrier Safety Administration – regulates U.S. commercial trucking.
FOB Origin
Buyer takes ownership of goods at the origin.
FOB Destination
Buyer takes ownership of goods at the destination.
For-Hire Carrier
A company or individual that transports goods or passengers for compensation.
Free Trade Zone (FTZ)
A duty-free area approved by the government for holding goods awaiting customs clearance.
Freight Brokerage
A business that buys and sells transportation services (aka 3PL).
Freight Forwarder
Acts as an intermediary for international shipments between shipper and transportation provider.
Full Container Load (FCL)
A full 20’ or 40’ container of goods for international shipping.
Full Truckload (FTL)
A shipment that fills an entire truck from origin to destination.
G
Gross Vehicle Weight (GVW)
Total weight of a tractor or semi.
H
Hire & Non-Owned Liability
Covers vehicles rented or used by employees not owned by the company.
I
Import
The movement of cargo into the destination country.
Insurance
A contract offering financial protection in exchange for premiums.
Insurance Company
An organization that has been chartered by a governmental entity to transact the business of insurance.
Insurance Market
An insurance company authorized to underwrite coverage.
Insurance Quote
An estimate of insurance premium and coverage offered by an agent.
Insured
A person or organization covered by an insurance policy, including the “named insured” and any other parties for whom protection is provided under the policy terms.
Insurer
The party to the insurance contract who promises to pay losses or benefits. Also, any corporation engaged primarily in the business of furnishing insurance to the public.
Interline Agreement
An agreement between carriers to transfer or move each other’s equipment.
Intermodal (IMDL)
Freight transported using multiple modes (e.g., truck + rail + ship).
Intermodal Marketing Company (IMC)
A logistics provider reselling intermodal transportation capacity.
International Fuel Tax Agreement (IFTA)
Fuel tax reporting agreement for interstate carriers (vehicles >26,000 lbs).
Interstate Transportation
Transport of goods or people across state lines
Intrastate Transportation
Transport of goods or people within one state.
J
K
L
Lease Agreement
A contract allowing an owner-operator to run under a carrier’s authority.
Less-Than-Truckload (LTL)
A shipping method for smaller loads that don’t require a full trailer.
Liability
A legal obligation to compensate a person harmed by one’s acts or omissions.
Liability Coverage
Insurance that provides compensation for a harm or wrong to a third party for which an insured is legally obligated to pay.
Logistics
Coordinating complex transportation operations and supply chains.
Loss Runs
Insurance documents detailing an insured’s past claims history.
M
Managing General Agent (MGA)
A business authorized by insurers to solicit and underwrite insurance.
MCS-90
A federal endorsement proving compliance with FMCSA insurance rules.
Medical Payments Coverage
Medical and funeral expense coverage for bodily injuries sustained from or while occupying an insured vehicle, regardless of the insured’s negligence.
Mode
A method of transport (e.g., truck, rail, air, sea).
Motor Carrier
A company engaged in the transportation of goods or people.
Motor Carrier Authority
FMCSA-issued authority for carriers in for-hire or regulated interstate commerce.
Motor Truck Cargo Insurance
Covers the value of the load carried by a commercial truck.
Motor Vehicle Report (MVR)
A driving history issued by a state DMV, including violations.
N
National Motor Freight Classification (NMFC)
A standard tariff classifying and describing freight commodities.
Non-Trucking Liability Insurance
Coverage when a truck is used for personal reasons, not dispatch.
O
On-Hook Coverage
Covers vehicles being towed by a tow truck.
Owner-Operator
A driver who owns their truck and usually operates under a lease agreement.
P
Partial Shipment
A shipment that uses only part of a trailer, remaining onboard from origin to destination.
Peril
A specific risk or cause of loss covered by insurance.
Physical Damage Insurance
Covers damage to a truck or trailer from covered causes (perils).
Policy
The written forms that make up the insurance contract between an insured and insurer. A policy includes the terms and conditions of the coverage, the perils insured or excluded, etc.
Port-to-Door
Transportation from a port of entry to the final destination.
Q
R
Reefer (Refrigerated Trailer)
A temperature-controlled enclosed trailer for perishable goods.
Rider
An addition to an insurance policy that becomes a part of the contract.
Risk
The possibility or chance of loss or injury.
S
Semi-Truck Insurance
Insurance coverage tailored for trucking businesses.
Small Parcel
Package delivery (e.g., via UPS, FedEx, USPS).
Shipper
The party that arranges and dispatches cargo for shipment.
Straight Truck
A single-unit truck where the cab and cargo area are combined.
Supply Chain
The series of steps involved in producing and delivering a product.
T
Trailer on Flatcar (TOFC)
A trailer loaded onto a flat railcar for transport.
Transportation Risk
The inherent risk involved in logistics and shipping operations.
Transportation Risk Specialists
Insurance experts in trucking and logistics coverage.
Trucking Auto Liability
FMCSA-required liability insurance for commercial trucking (min. $750,000).
Truck Insurance
Commercial auto insurance for motor carriers.
U
Umbrella Insurance
Supplemental coverage that kicks in after primary policy limits are exhausted.
Uninsured (Underinsured) Motorist Coverage
A form of insurance that pays the policyholder and passengers in his/her car for bodily injury caused by the owner or operator of an uninsured or inadequately insured automobile.
V
W
Waiver
An agreement attached to a policy which exempts from coverage certain disabilities or injuries that otherwise would be covered by the policy.
Warehouse
A storage facility for goods held for others.
Warehouse Legal Liability
Covers goods held by a warehouse on behalf of others.
Wholesalers
Intermediaries who place business between agents and insurers, often with underwriting authority.
Workers Compensation Insurance
Covers employee injuries on the job, including medical, wage, and death benefits.