Strategies, Challenges, and Answers

Bobtail Insurance Provides Limited Coverage

Bobtail InsuranceTruckers and trucking companies do business under many different contractual arrangements.  Some truckers drive as employees of a single trucking company.  Those drivers operate the company’s truck and pull the company’s trailers.  However, a common business model involves a person who owns and operates his or her own truck (known as an owner-operator).  These owner-operators “lease on” to drive for a properly licensed and authorized motor carrier.  Lease agreements between the motor carrier and the driver can be exclusive or flexible.  But in order to comply with federal law, the lessee motor carrier motor carrier must have “control of and be responsible for” the leased vehicle.  49 U.S.C. § 14102(a)(4).  The purpose behind the law was to “protect the public from the tortious conduct of the often judgment-proof truck-lessor operators.  AmeriGas Propane, L.P. v. Landstar Ranger , Inc., 184 Cal. App. 4th 981, 994-95, 109 Cal. Rptr. 3d 686, 696 (2010).

So when a driver is pulling a load for the motor carrier, the “trucking insurance” is responsible to provide liability coverage. However, there are times when a trailer is not hitched to the tractor.  At those times, the driver is said to be operating “bobtail”.  Most leases require the driver to obtain “bobtail” or “non-trucking” coverage for times when the driver is operating outside of business of the motor carrier to whom the truck and driver are leased.

Generally, bobtail insurance is not obliged to cover a trucker when the truck is in the business of the motor carrier to whom the truck is leased.   Zurich Ins. Co. v. Rombough, 19 Mich. App. 606, 173 N.W.2d 221 (1969).  Normally, bobtail or non-trucking insurance is sold to truckers at a lower premium because those policies provide limited coverage.  Ayers v. Kidney, 333 F.2d 812 (6th Cir. 1964).  Whether the non-trucking insurance applies or whether the trucking policy applies is going to be fact specific.  The general rule is that the motor carrier’s insurance is going to be read more broadly than the non-trucking policy.

For example, the trucker’s insurance would be primary over the bobtail coverage where the truck on its way to pick up motor carrier’s trailer. Hartford Ins. Co. v. Occidental Fire & Cas. Co., 908 F.2d 235 (7th Cir. 1990).  Often even after a driver has unloaded the cargo and is headed to the hotel to rest and await dispatch of the next load the trucking insurance applies.  Mahaffey v. Gen. Sec. Ins. Co., 543 F.3d 738 (5th Cir. 2008).  Auto-Owners Ins. Co. v. Redland Ins. Co., 549 F.3d 1043 (6th Cir. 2008).  But as it true in most instances, there are exceptions to every rule.  LeBlanc v. Bailey, 97-0388 ( La. App. 4 Cir 10/01/97), 700 So. 2d 1311;  Hudson Ins. Co. v. Miller, No. 2:15-cv-00349-GMN-CWH, 2016 U.S. Dist. LEXIS 50892 (D. Nev. Apr. 14, 2016).

The same can be true for purposes of maintenance.  The court can find that maintenance which is necessary under the lease, that the motor carrier’s policy covers the loss.  Great W. Cas. Co. v. Nat’l Cas. Co., 53 F. Supp. 3d 1154 (D.N.D. 2014).  Alternatively, when the repairs are cosmetic, the non-trucking policy might apply.  Casey v. Smith, 2014 WI 20, 353 Wis. 2d 354, 846 N.W.2d 791.

An important principle to keep in mind is to look at the lease to understand the business of the motor carrier and the facts to understand the actual practices of the lessor driver to be better able to support the position being argued.

So if you have questions about trucking law, feel free to contact Mike Mills at 702.240.6060×114 and speak with him.


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