Becoming an Owner Operator: Obtaining Authority and Insurance
To see the first blog in this series, click the link here.
In our last post, we discussed the key differences between an independent trucker who works with other carrier companies and an owner operator. The main difference between the two is that one of them is required to have insurance and operating authority, and that is the owner operator. If you’re looking to start your own owner operator business, the place to start is with getting the proper insurance and authority so that you can set yourself up for success on the road.
As an owner operator, you would need to obtain cargo insurance for however many trucks they have, plus general liability insurance since it is a business and you want to be properly protected in case of any worst-case scenarios. There are also other insurance options such as primary liability, passenger accident coverage and physical damage. General and cargo will be the two that you will need the most in order to move freight, as most companies you work with will require it.
When deciding on what type of authority to obtain, you may see options for getting interstate or intrastate authority. To haul intermodal loads and use apps like DrayNow, you would need to apply for interstate authority, even if you don’t plan on not leaving the state and just doing local runs. That’s because the cargo an intermodal carrier is hauling has crossed state lines, and the carrier needs the authority to carry interstate commerce.
Actually applying for interstate operating authority (also known as an MC number) is pretty simple and is done through the FMCSA. If you’re brand new to trucking, you would need to apply for a DOT number first which will get you registered with the FMCSA. If not, you can apply for new authority either online or by mail.
From all of these insurance policies and motor carrier credentials, it’s easy to see that there are a lot of costs involved with starting and keeping up an owner operator business. However, as an independent business owner, the sky’s the limit in what you can do. You will never be held back by a lease agreement or have some of your pay taken out by the carrier company whose authority you work under. Every dollar of revenue is kept, you don’t have to answer to anyone above you and a busines is growing in the process.
Stay tuned for more posts in this series on becoming an independent owner operator!
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