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Trucking Terms

Gain a Better Understanding of Trucking


Automatic Clearing House (ACH)

Direct deposit to a bank account.

Additional Insured (AI)

An entity that is added to a policy and receives the benefits of coverage and defense afforded under the insured’s policy. AI’s are typically only added to an Auto Liability policy.

Auto Liability (AL)

Coverage for damage to third parties caused by you or your company, for scheduled units and drivers. There are two main parts to Auto Liability: Bodily Injury & Property Damage.


Bill of Lading (BOL)

A transportation document that services the contract of the carriage along with any other conditions between a shipper and a transportation provider.

BMC-91X Filing

The filing sent to the Federal Motor Carrier Safety Administration (FMCSA) for Federal Filings. The filing is the proof of insurance to prove minimum liability coverage requirements have been met.

Bobtail Insurance

Bobtail covers the tractor anytime it is not attached to a trailer regardless of whether or not the truck is being utilized for business purposes.


Bobtail covers the tractor anytime it is not attached to a trailer regardless of whether or not the truck is being utilized for business purposes.

BOC-3 Filing

Carriers must designate a process agent to whom court papers may be served in a legal proceeding. You need to designate a process agent in each state where you maintain an office or establish contracts. Some companies offer blanket coverage that designates a process agent in every U.S. state.

Bodily Injury (BI)

Injuries sustained by a third party as a result of an at-fault accident.


The separation of a consolidated load into multiple smaller shipments.


An individual or company that serves as a liaison between another individual or company that needs shipping services and an authorized motor carrier.



A company in the business of transporting products by land, sea, or air.


A Commercial Driver’s License is only required when operating vehicles with 26,001 GVW or higher


A specialized form of equipment to carry an intermodal container.

Clean Up/Debris Removal

Covers clean-up done by tow company in the event cargo spills out of trailer during a collision.

Collision Insurance

Collision coverage applies to incidents in which your equipment is damaged in an accident and will pay to repair or replace your vehicle if it collides with another object or overturns.


The contents of the trailer.

Comprehensive Insurance

Comprehensive coverage applies to those incidents in which your equipment is damaged by something other than a collision with a vehicle or object, or if your equipment is stolen.


The act of combining multiple (two or more) shipments to achieve a low cost of transportation.

Contingent Cargo Insurance

A contingent insurance policy is often held by freight brokers that will defend against and pay settlements per the terms of a policy if the primary cargo policy held by the trucking company fails to pay a claim.

Contract Rates

A fixed price a carrier or broker negotiates with a shipper to move the shipper’s freight over a set period of time.

Controlled Substances/Alcohol BASIC

A CSA BASIC. Operation of CMVs by drivers who are impaired due to alcohol, illegal drugs, and misuse of prescription or over-the-counter medications. Example violations: Use or possession of controlled substances/alcohol.


A type of trucking company focused on efficient delivery of HVP (high-value products). This typically consists of expedited shipments and can include smaller shipments as well as FTL (full truckload).

Crash Rate BASIC

A CSA BASIC. Histories or patterns of high crash involvement, including frequency and severity. It is based on information from state-reported crashes.


The CSA Behavior Analysis and Safety Improvement Categories (BASICs) organize data from roadside inspections. From this data, a score is given for each of the 7 categories. Categories include: Unsafe Driving, Vehicle Maintenance, Hours of Service, Crash Rate, Controlled Substance and Alcohol, Hazardous Material Compliance, and Driver Fitness.

CSA Scores

Within the Compliance, Safety, Accountability (CSA) Operational Model, the Safety Measurement System (SMS) quantifies the on-road safety performance of carriers and drivers to identify candidates for interventions, determine the specific safety problems that a carrier or driver exhibits, and to monitor whether safety problems are improving or worsening.



The amount the insured is responsible for paying in the event of a covered loss/claim.


Transportation from origin to destination.


Transportation from origin to port of entry.

DOT Number

The U.S. Department of Transportation (DOT) requires carriers to have a unique identifier that is used to collect and monitor safety information, inspections, crash investigations, etc.

Drayage Carrier

A trucking company specializing in the transportation of goods via ground a short distance. Generally, drayage occurs most often to/from rail yards and ports when transporting containers.

Driver Fitness BASIC

A CSA BASIC. Operation of CMVs by drivers who are unfit to operate a CMV due to lack of training, experience, or medical qualifications. Example violations: Failure to have a valid and appropriate commercial driver’s license (CDL) and being medically unqualified to operate a CMV.

Driver Qualification (DQ) Files

Driver Qualification (DQ) Files are a record-keeping requirement for trucking companies. The FMCSA states a file must be kept on every employed driver that operates a CMV with a GVW greater than 10,001 lbs.

Drug Testing and FMCSA Clearinghouse

Whether it is complying with government regulations or customer contracts, it’s important to stay legal by managing your drug testing program and registering all drivers with the FMCSA Clearinghouse.

Dry Van

A common type of freight trailer utilized by commercial trucking companies. Typically, 48’ or 53’ in length and fully enclosed.


Electronic Logging Devices (ELDs)

ELDs plug into a CMV’s diagnostic port and record a driver’s Hours of Service. In addition, it records data related to the truck’s operation and driver activity.

Employer’s Liability Coverage

Coverage that pays for the legal expenses when an employee blames their employer for a workplace injury and sues for negligence. It picks up where workers’ comp ends.



A type of trailer consists only of a floor and is not enclosed.

Federal Motor Carrier Safety Administration (FMCSA)

An agency within the Department of Transportation. Serves as the regulatory entity for all trucking companies.

Freight Brokerage

A company in the business of buying and selling transportation services. Also referred to as a 3PL or third-party logistics provider.

Full Truckload (FTL)

Trucking companies that move shipments from point-to-point that consume the entire amount of trailer space.


General Liability (GL)

This coverage is required by some brokers to run loads with them. It is typically an inexpensive coverage but is subject to the underwriter’s approval.

Gross Vehicle Weight (GVW)

The total weight including all packaging and freight.


Hazardous Materials (HM) Compliance BASIC

A CSA BASIC. Unsafe handling of HM on a CMV. Example violations: Release of HM from the package, no shipping papers (carrier), and no placards/markings when required.


Hazardous materials. Means a substance or material which has been determined by the Secretary of Transportation to be capable of posing an unreasonable risk to health, safety, and property when transported in commerce, and which has been so designated.

Heavy Vehicle Use Tax

To fund highway programs, the federal government charges an annual tax on trucks exceeding 55,000 pounds.

Hire Liability

Coverage for bodily injury and property damage caused by a vehicle you hire (including rental and loaner vehicles).

Hours-Of-Service (HOS) BASIC

A CSA BASIC. Operation of CMVs by drivers who are ill, fatigued, or in non-compliance with the HOS regulations. This BASIC includes violations of regulations pertaining to records of duty status (RODS) as they relate to HOS requirements and the management of CMV driver fatigue Example violations: HOS RODS, and operating a CMV while ill or fatigued.


Insurance Quote

The act of getting an insurance quote from a licensed insurance agent.


A person or organization covered by insurance.


Denotes when cargo is to be moved by more than one way of transportation.

International Fuel Tax Agreement (IFTA)

An agreement between the lower 48 states of the United States and the Canadian provinces, to simplify the reporting of fuel use by motor carriers that operate in more than one jurisdiction.

International Registration Plan (IRP)

IRP distributes registration fees based on the distance traveled in each state or Canadian province. Contact your state’s transportation website to register.


A type of operation where truckers are hauling goods in more than one state.


When truckers are hauling within the state where their business is registered. A separate type of filing is required for this operation.


Lease Agreement

An agreement between an independent owner-operator and a truck company to run permanently under the authority of the trucking company.

Lease-Purchase Plans

Lease-purchase plans are primarily for truckers who don’t have enough for a down payment or have bad credit. Experts say you typically pay more in such arrangements versus traditional financing.

Less-Than-Truckload (LTL)

A transportation method for smaller shipments consisting of less than a full truckload but larger than a typical small parcel shipment.


The detailed coordination of a complex operation involving transportation services, people, and/or facilities.

Loss Runs

Reports provided by your insurance company that document the claim activity on each of your policies. Even if no claims have been reported on a policy, a loss run report should be generated reflecting no losses. These are available free of charge from your insurer.


Managing General Agent (MGA)

A business appointed by an insurer to solicit business from agents/agencies.


The FMCSA requires all interstate carriers to file or update the MCS-150 Form. This form is used ONLY to update your USDOT number and is required to be updated every 24 months.

MCS-90 Endorsement

An endorsement proving you have coverage to pay for the loss for which the insured was legally liable. This endorsement is issued by the Auto Liability provider. 

Med Pay

Pays medical expenses for you and any passengers in your vehicle who are injured during an accident or auto-related injury.

Motor Carrier

A company in the business of transporting products by land.

Motor Carrier Authority

A requirement through FMCSA that companies who operate as for-hire carriers, transport passengers for interstate commerce, or transport federally-regulated commodities in interstate commerce.

Motor Carrier Number (MC#)

Is a 6-digit code that is specific to each company operating commercial trucks.

Motor Truck Cargo (MTC)

Coverage for damages to the scheduled cargo that is being hauled as a result of a covered loss.

Motor Vehicle Record (MVR)

A snapshot of a driver’s previous driving history.


Non-Owned Trailer Coverage (NOTC)

Physical Damage coverage extended to a non-owned trailer while attached to a covered (or scheduled) power unit. When covering the non-owned trailer, there is only coverage when the trailer is attached to a covered (scheduled) power unit.

Non-Trucking Liability (NTL)

This coverage comes in the form of an endorsement for those using their truck for non-business-related purposes. NTL can pay for property damage or bodily injury to others in the event of an accident with or without the use of the trailer.


Occupational Accident (Occ/Acc)

Coverage to an independent contractor for an injury sustained while performing duties of the lease with the motor carrier as a driver of a truck dispatched by the motor carrier.

Operating (Full-Service) Lease

With this lease, you take care of maintenance, taxes, and permits, and at the end of the lease term, you walk away.

Operating Authority

All for-hire carriers must receive operating authority from the DOT. This dictates what type of cargo you can carry.

Operational Radius

The overall distance you travel from your garaging location plays a role in the cost of your premiums.

Out-Of-Service Order (OOS)

A declaration by an authorized enforcement officer of a Federal, State, Canadian, Mexican, or local jurisdiction that a driver, a commercial motor vehicle, or a motor carrier operation is out of service and may no longer legally operate.


A driver who owns and operates his/her own truck. Owner-operators typically operate under the motor carrier authority of a trucking company under a lease agreement.


Partial Shipment

A shipment occupies a portion of a trailer and leaves room for additional cargo.

Personal Injury Protection (PIP)

PIP insurance pays for an insured’s medical and other injury-related costs, regardless of which driver was at fault. The coverage varies between states but may include: Medical Expenses, Funeral Costs, Lost Income, or Survivors’ Loss. PIP does not compensate you for pain and suffering.

Physical Damage (PD)

Coverage for damages that occur to your equipment (units or trailers), regardless of fault, if Physical Damage coverage is in place for that piece of equipment. Also known as Comprehensive / Collision coverage.


Transportation from the port of entry to the destination.

Power Unit

The truck only. Not including the trailer.


The amount the insured agrees to pay for the coverage detailed on their policy. Additional taxes and fees may apply in addition to the premium.

Premium Finance Agreement (PFA)

When a third party funds the entire insurance premium upfront and allows the trucking company a bill plan to pay them back over the course of the policy period. They typically charge 10% interest.

Property Damage

Third-party property that is damaged as a result of an at-fault accident.

PSP (Pre-Employment Screening Program) Report

A PSP report can be run by you, the owner of the company, on any driver. The report will show a driver’s most recent five years of crash data and the most recent three years of roadside inspections.


Reefer Breakdown

This optional coverage can be added to the insured‘s cargo policy if they are hauling refrigerated commodities scheduled on their policy. This coverage protects the policyholder from claims that occur due to malfunctioning of the refrigeration unit, which leads to spoilage of goods being transported.

Reefer or Refrigerated Trailers

A type of trailer fully enclosed that is temperature-controlled and designed to keep perishables refrigerated.


Safety Measurement System (SMS)

SMS uses a motor carrier’s data from roadside inspections, including all safety-based violations, State-reported crashes, and the Federal motor carrier census to quantify performance in the following Behavior Analysis and Safety Improvement.


The party that prepares and tenders cargo for shipment.

Small Parcel

A form of transportation focused on the delivery of packages.

Spot Rates

A one-time, transactional rate between a carrier/broker and a shipper based on the real-time market value of moving the shipper’s freight from point A to point B. 

Straight Truck

Trucks with the driving compartment and trailer are permanently attached and considered one single unit.

Supply Chain

The sequence of processes involved in producing and distributing a product.


Terminal Rental Adjustment Clause (TRAC) Lease

With this lease, you make a small down payment and at the end of the lease you purchase the truck for its residual value, or you can opt for the leasing company to sell the truck.

Towing & Storage

Coverage is only in place for scheduled equipment on the policy that has Physical Damage coverage in place. Towing & Storage is not the same as roadside assistance – this coverage is only in place in the event of a tow resulting from a covered claim.

Trailer Interchange Agreement

A contract that arranges the transfer of a trailer to a second trucker so that the trailer can be delivered to its final destination, or until it can be transferred to another trucker. This coverage is needed when a trucker rents a trailer.

Trailer Interchange (TI)

Provides coverage for damages occurring to a non-owned trailer while it is in your possession but requires a written agreement to be in force between you and the owner of the trailer.

Transportation Risk

The inherent risk involved with a transportation or logistics activity.

Transportation Risk Specialists

Transportation specialists with knowledge and experience in the trucking and logistics marketplace.


Uniform Intermodal Interchange and Facilities Access (UIIA)

The UIIA is the only standard industry contract that outlines the rules for the interchange of equipment between intermodal trucking companies and equipment providers (ocean carriers, railroads & equipment leasing companies)

Umbrella Insurance

Insurance coverage increases the limit of a primary policy should a catastrophic event ever occur. It is common for this to be written in excess of Auto Liability (AL), General Liability (GL), and Workers Compensation (WC) along with other policies. This coverage would kick in when the primary limit has been fully exhausted.

Underinsured Motorist (UM)

Covers costs incurred that surpass the at-fault party’s policy limits.

Uninsured Motorist (UIM)

Covers damages caused by an uninsured motorist.

Unsafe Driving BASIC

A CSA BASIC. Operation of commercial motor vehicles (CMV) by drivers in a dangerous or careless manner. Example violations: Speeding, reckless driving, improper lane change, and inattention.


Vehicle Identification Number (VIN #)

17-digit serial used to identify trucks.

Vehicle Maintenance BASIC

A CSA BASIC. Failure to properly maintain a CMV and/or properly prevent shifting loads. Example violations: Brakes, lights, and other mechanical defects, failure to make required repairs, and improper load securement.



A facility utilized for the holding of goods on behalf of another party.

Warehouse Legal Liability

Coverage for a property that the insured takes possession of and stores at their facility.


A type of insurance broker who acts as an intermediary between a retail broker and an insurer, while having no contact with the insured. Wholesale agents place business brought to them by retail agents. They also act as pre-underwriter for insurance companies.

Workers’ Compensation

Offers your employees medical, rehabilitation, income benefits, and more if injured while on the job.