Complete Guide To Trucking Insurance Coverage And Requirements In Toronto

The trucking industry drives the Canadian economy—literally. Every day, thousands of commercial trucks move essential goods across highways, urban centres, and international borders.

According to the Canadian Trucking Alliance, over $850 billion in goods move by truck annually in Canada, and trucking accounts for more than 70% of all surface freight transportation across North America. With that level of responsibility comes exposure to significant risk.

A single collision, cargo incident, or mechanical failure can create losses totalling hundreds of thousands—sometimes millions—of dollars. That’s why trucking insurance is not just a legal requirement; it is a crucial shield that protects drivers, fleets, businesses, and the public.

This trucking insurance guide explains everything trucking operators need to know about insurance requirements, coverage types, average costs, risk factors, and how to choose the right provider. Whether you’re an independent owner-operator or managing a fleet, this guide helps you protect your business and stay compliant.

Let’s get right into it!

What Trucking Insurance Is And Why It Matters

Trucking insurance is a category of commercial insurance specifically designed to protect motor carriers, drivers, equipment, and cargo during transport.

Unlike personal auto insurance, trucking policies consider factors such as commercial liability, cargo value, long-distance routes, hazardous loads, environmental exposure, and the financial impact of supply chain delays.

A properly structured trucking insurance policy ensures that:

Damage to vehicles is covered
Injuries to drivers or third parties are handled
Cargo loss, theft, or spoilage is compensated
Your business complies with regional and federal transport law
Lawsuits and liability claims do not destroy your operation

Because trucking accidents often result in high-cost damages, industry data shows that the average commercial trucking accident claim ranges between $150,000 and $500,000, and catastrophic losses can exceed $1 million. Without proper coverage, a single incident can shut down an entire business.

Types Of Coverage Every Trucking Business Needs

Commercial Auto Liability Insurance

Commercial auto liability is mandatory for all commercial vehicles operating in Canada. This coverage protects you from legal and financial responsibility if your truck causes bodily injury or property damage. Liability limits vary depending on cargo type and whether you travel between Canada and the United States.

Cross-border trucking requires compliance with FMCSA (Federal Motor Carrier Safety Administration) regulations and higher minimum liability limits.

Physical Damage Coverage

Physical damage insurance includes both collision and comprehensive protection. It covers:

Accidents involving other vehicles
Weather damage such as hail or floods
Fire
Theft or vandalism

This coverage protects your truck even if the accident is your fault.

Cargo Insurance

Cargo insurance protects the load you’re hauling. This is particularly important for high-value cargo such as:

Electronics
Pharmaceuticals
Alcohol
Metals
Food and perishables

Cargo theft is one of the fastest-growing transportation risks. According to Équité Association, cargo theft in Canada increased 29% in 2023, with Ontario being the most targeted province.

Without cargo insurance, trucking companies may face significant out-of-pocket losses.

General Liability Insurance

Commercial general liability covers non-vehicle incidents such as:

Damage to a customer’s property at a drop-off site
Slip-and-fall claims during loading
Errors in loading, unloading, or product handling

This is separate from auto liability and is often required by brokers and commercial clients.

Bobtail And Non-Trucking Liability Coverage

These policies provide coverage when you’re driving your truck for personal use or without a trailer. Owner-operators leased onto a carrier often require their own non-trucking liability policy.

Trailer Interchange Insurance

If you haul another company’s trailer under a trailer interchange agreement, you need this coverage to protect the trailer against damage or loss.

Reefer Breakdown Coverage

Refrigerated trucking is highly sensitive. If your reefer unit fails, you risk spoilage of entire trailer loads. This coverage protects against:

Spoilage
Equipment breakdown
Temperature deviation

Given the economic value of perishable cargo, reefer breakdown insurance is essential.

Workers’ Compensation And Occupational Accident Coverage

The trucking industry has one of the highest rates of workplace injury. Transport Canada reports that truck driving accounts for more than 17% of all workplace fatalities in Canada.

Workers’ compensation or occupational accident coverage is necessary to protect drivers and employees.

Mandatory Insurance Requirements By Province

Each province sets minimum insurance requirements for commercial carriers. While basic liability is required everywhere, rules vary based on whether you operate intra-provincially, inter-provincially, or cross-border.

Ontario

Must comply with CVOR (Commercial Vehicle Operator’s Registration)
Liability insurance required for all commercial trucks
Higher limits for hazardous goods

British Columbia

ICBC sets commercial insurance requirements
Additional private insurance often recommended for fleets

Quebec

Governed by SAAQ (Société de l’assurance automobile du Québec)
Unique public/private coverage hybrid

Cross-Border Trucking

Trucks entering the U.S. require:

FMCSA compliance
MCS-90 endorsement
Liability limits typically ranging from $750,000 to $5,000,000 USD

Key Factors That Influence Trucking Insurance Costs

Insurance rates vary due to a wide range of risk factors, including:

Driver experience and age
Driver safety history (accidents, CVOR violations)
Type of cargo
Distance and operating radius
Number of trucks in your fleet
Make, model, and value of trucks
Safety rating and company history
Whether you are a new venture or established carrier

New trucking companies (“new ventures”) often face higher premiums—sometimes up to 40% higher—because insurers categorize them as a higher risk until they build a verifiable safety record.

Average Cost Of Trucking Insurance In Canada

Although rates vary, typical annual trucking insurance costs are:

Owner-Operator: $12,000–$22,000 per year
Small Fleet (3–10 trucks): $30,000–$75,000 per year
Mid-Sized Fleet: $80,000–$250,000+ per year

Costs are higher for fleets that:

Transport hazardous materials
Travel long distances
Move high-value cargo
Operate in large urban centres like Toronto or Vancouver

How To Reduce Trucking Insurance Premiums

Insurance premiums can be lowered through strategic safety and operational improvements.

Driver Safety Training

Companies that invest in training reduce collision frequency and claims.

Telematics And Dash Cameras

According to a study by the American Transportation Research Institute, telematics and AI-enabled dash cameras can reduce accidents by up to 40%, significantly lowering premiums over time.

Regular Maintenance And Inspections

Well-maintained trucks pose fewer risks and generate fewer claims.

Improving Safety Scores

A clean CVOR and strong safety record are major factors in reduced pricing.

Red Flags To Watch For When Hiring An Insurance Provider

Not all insurance providers are equal. Watch for:

Extremely low quotes (indicating poor claims support)
Delayed underwriting or unclear communication
Missing or vague policy exclusions
No knowledge of trucking-specific risks
Poor customer reviews or slow claim payouts

Choose a provider with proven experience in commercial trucking.

How To File A Trucking Insurance Claim

If an incident occurs, follow these steps:

Report the incident to your insurer immediately
Collect documentation: photos, dash cam footage, police reports
Secure cargo and prevent further damage
Provide logs, ELD data, and maintenance records
Cooperate with adjusters throughout the process

Typical claims can take days to months depending on complexity.

Tips For Fleets And Owner-Operators

For Fleets

Implement written safety programs
Keep detailed maintenance logs
Rotate drivers strategically
Use telematics to coach and correct risky behaviours

For Owner-Operators

Maintain clean driving and violation records
Choose appropriate coverage based on cargo and routes
Understand leased versus owned equipment limitations

The Role Of Technology In Modern Trucking Insurance

Technology is reshaping the industry. Telematics, GPS tracking, and AI systems allow insurers to assess risk more accurately. Fleets using advanced telematics have seen:

Fewer collisions
Lower fuel consumption
More competitive premiums
Better maintenance forecasting

Predictive analytics are becoming essential tools for both fleets and insurers.

Conclusion

Trucking insurance is not simply a legal requirement—it is the foundation of a stable, financially protected transportation business. With rising accident costs, increasing cargo theft, and strict regulations, choosing the right coverage is essential.

Understanding the various policy types, provincial rules, risk factors, and cost-saving methods ensures that your business is protected on every route. Whether you operate a single truck or a growing fleet, investing in comprehensive insurance and safety programs will strengthen your business for the long haul.

FAQs

What Insurance Is Legally Required For Trucking In Canada?
Commercial auto liability is required for all commercial trucks, with additional coverage needed for hazardous goods or cross-border transport.

How Much Does Trucking Insurance Cost For An Owner-Operator?
Most owner-operators in Canada pay between $12,000 and $22,000 annually depending on cargo type, experience, and driving history.

Do I Need Cargo Insurance?
Yes. Many brokers and shippers require it, especially for high-value or temperature-sensitive goods.

Can New Trucking Companies Get Affordable Insurance?
New ventures pay higher rates, but safety technology and driver training help lower premiums.

Is Personal Auto Insurance Enough For Commercial Driving?
No. Commercial trucking requires specialized coverage because of higher liability.

What Happens If I File A Claim?
You must report the incident immediately, provide evidence, and cooperate with adjusters to resolve the claim efficiently.

Does Driving History Affect Insurance Premiums?
Absolutely. Violations and CVOR issues significantly increase costs.

Does Trucking Insurance Cover U.S. Travel?
Yes—if your policy includes FMCSA-compliant cross-border protection.

What Is Non-Trucking Liability Insurance?
It covers the truck when operated for personal or non-commercial purposes.

Can I Lower My Insurance Premiums With Telematics?
Yes. Telematics and dash cams reduce accidents and often lead to lower premiums.

Complete Guide To Trucking Insurance Coverage And Requirements In Toronto