How Much Coverage Do I Need?

Choosing the right coverage limits is one of the most important decisions you'll make. Here's how to think about liability, physical damage, and cargo coverage.

Liability limits

Liability coverage pays for damage and injuries you cause to others. It's usually expressed as a single "combined single limit" (CSL) like $1,000,000 CSL.

Consider these factors:

• Contract requirements: Many customers and general contractors require $1M liability minimum
• State minimums: These are often too low for real protection
• Your assets: Higher limits protect your business and personal assets from lawsuits
• Industry standards: Trucking requires $750K-$1M+ by federal law

Physical damage deductibles

Physical damage (comp and collision) protects your own vehicles. Higher deductibles mean lower premiums, but more out-of-pocket when you have a claim.

• $500-$1,000: Standard for most businesses, good balance of cost vs. protection
• $2,500-$5,000: Lower premiums, but can hurt cash flow after a loss
• Percentage deductibles: Common for trucking (2-5% of vehicle value)

Cargo coverage (for truckers)

Motor truck cargo covers the freight you haul. Most broker contracts require $100,000 minimum, but consider:

• What's the maximum value of a single load you haul?
• Do you haul refrigerated goods? (higher values, reefer breakdown coverage)
• Are there specific commodities excluded from your policy?

Our recommendation

For most small businesses, we recommend $1M liability as a baseline. It's often required by contracts, provides real protection, and the premium difference between $500K and $1M is usually modest.