Insurance question

You need a equipment lease with specified payment terms. Then a insurance agent that knows what they are doing.

 

Those are fairly normal conditions for an owner operator to have their own IRP account (truck registration) while not having their own operating authority. Nothing stands out as unusual.

Now the more important question is why does your insurance say he may not be able to lease on to you? Did they find something troubling in his driver license record or SMS report? Or is your policy not written to allow leased on drivers, or any other drivers for that matter? Many new companies are prohibited by their insurance company from adding trucks or drivers for the first year or two.

When adding an owner operator to run under your authority it is looked at by the FMCSA and insurance company as if you own the vehicle and employ the driver, no different than buying a second truck and hiring a driver. This may be part of the problem if the driver doesn't meet your insurance company's qualification standards. Perhaps his truck is too old for them, or they flat out don't do leased on equipment/drivers or they just don't allow you to have more than one truck/driver. By regulation your insurance must cover any truck operated under your DOT number as if it was owned and operated by you, so naturally the truck and driver must meet your insurance companies requirements. Their objection could even be as simple as the owner operator not having adequate non-trucking (bobtail) liability that meets their requirements.

Of course I am speculating as I don't know the size or scope of your operation but by the question I am guessing this is your first foray into having a leased driver/owner operator at your company. Ask your agent to explain why they don't want to cover an owner operator leased on to your company and then if the answer isn't satisfactory start searching for a better insurance company.

 

Went down this rabbit whole once. Was gonna lease on with a buddy. Well his agent that he had for years was useless. He had no idea what we wanted. Keep getting kicked back at like 15k per year. Later found out said agent was adding me as a employee to all equipment. Trucks and heavy equipment. Agent took so long, I filled for my authority and got it before this idiot understood. In the end he lost his customer over it too. My buddy was able to switch to a better insurance co. And save money. This guy was clueless. Almost as clueless as progressive commercial insurance. The professionals in the trucking industry. Thats another story.

Is important to partner with the right people.