In the past few years, the chartered transportation industry has continued to record year-on-year revenue growth. Such progress is attributable to trends such as increased leisure time, a rapidly growing urban population, and higher disposal incomes. However, new entrants will find that running a charter bus business comes with significant risks, especially for buses that travel interstate.
Quite a number of fatal crashes involving transportation buses happen each year. Bus transportation companies ferry many people at once and rely on several drivers and staff, which further increases the company’s liability. As such, you need tailored insurance coverage that will consider all aspects of your transportation company.
Read on to learn more about insurance for your new charter business.
Areas of Coverage
Bus insurance policies typically comprise of bodily injury, property damage, collision, medical payment, uninsured/underinsured, and comprehensive coverage.
A large portion of the insurance policy will cover the cost of medical care for a passenger or a driver riding in your bus or a third party who sustains injuries in an accident involving your bus.
The policy also covers the cost of repairing your bus after an accident and any non-collision losses due to factors such as theft or vandalism. Depending on your business needs, you may opt for additional coverage to ensure that your business is fully protected against costly liabilities.
Insurance Coverage Limits
The coverage limit is an important consideration when planning for insurance for your charter buses because this coverage is the maximum amount of money an insurance company will pay out following an accident.
Each type of coverage within your insurance policy has its own limit. Generally, the higher the coverage limits, the higher your yearly premium, or the cost of your insurance policy.
The Federal Motor Carrier Safety Administration (FMCSA) sets the insurance coverage limits for commercial vehicles, including charter buses. According to the agency, the minimum liability coverage for a bus with a capacity for more than 15 people is $5,000,000 and $1,500,000 for a bus with a carrying capacity of fewer than 15 passengers.
The annual cost of your insurance policy will depend on several factors and will be different for every transportation company. These factors include several variables, such as the size of your bus, whether you provide services locally or across states, the value of your bus, your drivers’ age and driving history, and the inherent risks in your business.
Federal rules govern interstate transportation services. Driving a bus across states presents distinct risks, which can have implications for the cost of your insurance policy.
Larger buses have a higher liability coverage limit, therefore, the premiums are set to be comparably higher than for a bus with a smaller seating capacity.
Insurance companies also assess the age and driving history of bus drivers to determine whether the driver would increase the risk of accidents, which can be costly for the insurance company. Your insurance budget will benefit if you hire drivers with a clean background.
Your insurance premium is among the various fixed expenses that will significantly impact your hourly rates and your ability to remain competitive in the industry. A good insurance company will work with you to develop an insurance policy that meets your business needs and saves you money.
Whether you are starting with a single bus or a fleet of coaches, investing in the right type of insurance coverage will let you drive your business in the right direction.
At Metropolitan Insurance Service Consultants, Inc, we are committed to safeguarding your business against costly liabilities. Call us today for customized charter bus insurance in Florida.