Movers Insurance 101 - Insurance for Moving Companies Guide

Moving companies offer an essential service to consumers, but their job is not without risk. An employee could get into an accident on the way to a job, or a customer’s items may be damaged during unloading. Movers insurance can help mitigate these risks and allow you to operate with peace of mind.

Why Do You Need Movers and Storage Insurance Coverage?

If you offer moving services, you must have movers and storage insurance. A lot can go wrong between loading up the truck and unloading at the customer’s new home.

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Moving companies also face additional risks due to the nature of the business.

For example:

An employee may be injured while moving a customer’s belongings.
One of your movers may damage a customer’s item while loading, unloading or transporting their belongings.
Your moving truck may get into an accident that causes damage or injuries.

For moving companies, the risk of doing business without proper insurance is too high. Liability claims can easily bankrupt a mover.

If you offer interstate moving services (long-distance moves), insurance becomes even more imperative and may be required by law.

Having the right coverage will give you peace of mind that if the worst should happen, you’re protected.

What Insurance Coverage Do Moving Companies Need?

While every moving company is different, there are some general insurance policies that all movers should have, such as:

General Liability

Every mover should have general liability insurance. Why? Because it offers two crucial types of coverage:

Bodily injury – If an employee injures a client while loading their belongings onto the truck, bodily injury will cover the cost of medical care.
Property damage – If one of your movers drops a customer’s item and breaks it, property damage will cover the cost of replacement.

One thing to note is that bodily injury and property damage only provide coverage while loading and unloading items. If a customer’s belongings are damaged in transit, you will need another type of insurance to cover this scenario.

Professional Liability

Along with general liability, movers should also have professional liability, which covers:

Misrepresentation
Negligence
Inaccurate advice
Violation of good faith

Unlike general liability, which covers physical damage and injuries, professional liability covers financial losses.

As a mover, you may face claims of financial damage if:

You violate the terms and conditions of your contract
You fail to meet the contract’s deadline
You accidentally deliver the wrong person’s items to the customer

Professional liability may not seem like essential coverage, but if you’re faced with any of the above scenarios, you could face serious liability claims.

Truck Insurance or Commercial Auto

If you have your own truck or van that you use to transport your customer’s items, you will need truck insurance or a commercial auto policy.

Whether you’re moving a customer’s items across the country or across the street, there is always a risk of an accident. Commercial auto or truck insurance will cover:

Bodily injury: If the other party is injured by an accident you caused, bodily injury will cover the cost of medical care.
Property damage: If you or an employee damage someone else’s property in an accident, then property damage will cover the loss.
Collision: If you’re in an accident with another vehicle or object, collision will cover the cost of repairs.
Comprehensive: If your truck is damaged by fire, theft, the weather or other covered non-collision causes, comprehensive will cover the cost of repairs.

Your moving trucks are essential to your business. Make sure that you purchase adequate insurance coverage to protect these important assets.

Workers’ Compensation

If you have employees, you will likely be required to have workers’ compensation insurance. Nearly every state requires businesses with employees to have this insurance.

If an employee is injured on the job, workers’ compensation will cover the cost of:

Medical care
Rehabilitation
Lost wages

Even if you operate your business in a state that doesn’t require workers’ comp, having this coverage is beneficial. Without it, you could face lawsuits from injured employees.

Commercial Property

If you operate your business out of a physical location, you will need a commercial property policy.

Commercial property insurance will protect your business’ building and equipment against damage caused by:

Natural disasters
Smoke and fire
Vandalism

Business Interruption

If your moving truck is in an accident or is damaged in a natural disaster and is stuck in the shop, you won’t be able to operate your business. In this type of scenario, business interruption insurance can help cover the cost of payroll, lost revenue and more.

Disaster can strike at any time, so having this coverage will give you peace of mind that you can keep your doors open if you’re forced to shut down temporarily.

Cyber Liability

If your moving company has a website and uses your site to collect payments or book customers, you will want cyber liability insurance.

Data breaches are becoming more frequent, and they can cost your business a lot of money. Along with covering the damage to your own company, this policy will also cover damage to clients.

Some moving and storage insurance policies have this coverage built-in, but if yours does not, consider purchasing it for added protection against cyberattacks.

Umbrella Insurance

Umbrella insurance is another policy to consider, and it’s often worth the additional monthly cost. If an insurance claim is filed against you, there’s a chance that it will exceed your liability limits. In this case, you will be held liable for the excess costs out of pocket.

Umbrella insurance will cover these excess costs so that your business doesn’t have to pay for the difference between the settlement amount and what your liability coverage covers.

Moving Company Insurance Requirements

Moving company owners should review their state-specific insurance requirements. You’ll need to meet certain requirements, such as having general liability coverage or a business owners policy (BOP), but policy limits will vary.

Full Value and Released Value Protection

The FMCSA does require that interstate movers offer two liability options to their clients:

Full Value Protection

Full value protection requires that you offer a full replacement for anything damaged or lost during shipment. This level of coverage is more expensive and comprehensive than released value protection, and it’s the default coverage provided if the customer doesn’t choose released value protection.

Under this level of protection, you must offer to:

Repair any item broken in transit
Replace any item damaged or lost in transit with one that is “similar”
Settle the cost of the repair in “cash,” giving the market replacement value for the item

There are a few caveats with full value protection for “items of extraordinary value.” For example, if the value of a certain item is $100 or more per pound, it would fit into this category. Jewelry often exceeds this value and would not need to be replaced if lost or damaged, but the items also cannot be listed on shipping documents.

Released Value Protection

Released value protection is the second kind of protection and is often chosen because it is less costly. With this protection, you’re only responsible for $0.60 per pound for a single item. If you damage a 25-pound nightstand, you will only pay $15 in replacement costs.

Unlike full value protection, you cannot charge customers more for released value protection.

How Much Does Movers Insurance Cost?

Movers insurance has a lot of factors that affect rates. In most cases, you’ll pay higher premiums based on:

Number of employees
Location
Policy limits
Claim history

General costs for movers insurance based on $1 million coverage are:

Commercial auto insurance costs $275 – $500 a month
Cyber liability costs $70 – $80 a month
General liability costs $105 – $110 a month
Professional liability costs $80 – $90 a month
Workers’ compensation costs $125 a month

Based on these four types of insurance, you’ll pay between $380 and $405 per month. You then need to add in your commercial auto insurance, which for a box truck, is somewhere between $275 to $500 a month. However, business insurance for moving companies may be higher or lower based on the type of moving you offer.