Moving company insurance: what you need, in what order, and what it costs

The insurance a new moving company actually needs, in the order to buy it: general liability, cargo, commercial auto and workers' comp, with real monthly costs and how we handle damage when it happens.

"Are you insured?" is the question every customer with something worth moving asks, usually right after they hear your price. The answer has to be true. Ours today is yes: general liability, cargo coverage, and workers' comp on every crew member.

My first jobs were a box from the post office and couches across town. A full-house move is a different risk, and it needs a different answer. Here is what each kind of coverage does, what order to buy it in, what it costs, and how to handle the damage that happens anyway.

We are movers, not insurance agents. Rules and prices differ by state. Get real quotes before you rely on any number here.

The four policies, in the order to buy them

1. General liability. Covers damage to the customer's home and injuries to the customer. The dinged door frame, the scraped hardwood, the person who trips over your dolly. This is the one every landlord, building manager and Google Local Services Ads application will ask for a certificate of. Expect roughly $50 to $150 a month for a small operation. Buy it before the first job with furniture in it.

2. Cargo coverage. Covers the customer's belongings while they are in your care. If your state requires a household goods permit, it may set a minimum. For interstate household goods carriers, federal rules require at least $5,000 per vehicle and $10,000 per occurrence.

3. Commercial auto. Covers a vehicle you own and use for the business. If you rent, rent from a commercial desk that knows the truck is for a moving company, get the coverage that comes with it in writing, and ask your agent about hired auto liability, which covers vehicles you rent for the business. A consumer rental's damage waiver is not the answer: U-Haul's terms limit its trucks to do-it-yourself moving and say other use can void the coverage. Renting a truck for a moving business. The day you buy your own truck, or a pickup and trailer, it goes on the list.

4. Workers' comp. Covers your crew when they get hurt, which in this job eventually happens. In most states, including ours, you need it the day you have an employee, and the fines for not having it are far larger than the premiums.

What it costs to insure a moving company

For a small local operation starting out, the big recurring number is general liability at roughly $50 to $150 a month. Cargo coverage is often bought alongside it. Workers' comp is priced off your payroll, so it starts small and grows with the crew; for a two-person operation it is a manageable monthly cost. Commercial auto depends entirely on the vehicle and the driver.

Interstate moving is a different scale. Federal rules require $300,000 in liability coverage for a fleet of only vehicles under 10,001 pounds, and $750,000 for vehicles of 10,001 pounds or more. That is one more reason to start local. What the licensing side requires.

Every one of these costs belongs in your price. The pricing calculator has a field for payroll taxes and workers' comp as a percent of wages, and the rule is the same as everything else: work out what it costs you, and double it.

The helper question: employee or contractor?

Some new movers pay helpers as contractors to avoid workers' comp. For someone you schedule, direct on the job and pay by the hour, that usually does not hold up. An injured helper without coverage is the fastest way to lose the company.

Get a workers' comp quote before you hire, not after. What to pay a helper, and what the owner keeps.

How to answer "Are you insured?"

If you are: "Yes. General liability and cargo coverage, and I can email the certificate with the agreement."

If you are not yet: "Not yet. I am taking labor-only and single-item jobs while I get set up, which is why this one is priced the way it is, and you keep the truck."

Never say yes until it is true. The honest answer is the only one that survives a damage claim. The rest of the call is in the quote script.

Released value: what most customers do not know

The industry's basic coverage is called released value: 60 cents per pound per item. Federal rules require interstate movers to include it at no charge. It means a 30-pound television is worth $18.

Most customers do not know that until something breaks, which is why your agreement should say it plainly and offer full-value coverage as an option. The customer who chose released value in writing is not surprised later. The one who never heard of it is.

What happens when something breaks

You pay for it, fairly and fast, and the process is on the agreement before it happens.

In practice, on a small company's local job, most damage is small. A broken lamp is a $40 credit on the invoice and an apology, and the review is still five stars. The damage you cannot afford is the one you argued about.

The habit that keeps damage rare is wrapping: every piece of furniture goes into blankets and shrink wrap before it moves, and a wrapped dresser is also the visible proof a customer needs that you are a professional. The cheapest insurance there is costs $20 a roll.

Insurance and the paperwork that comes with it

• Certificates of insurance. Buildings, property managers and storage facilities will ask for one before you load. Your agent issues them, usually the same day. Ask how to request one before you need it on a Friday afternoon.
• "Insured" on the profile. Put it on your Google Business Profile and your ad the day the policy starts, not before.
• Google Local Services Ads. The best paid lead channel for movers needs a general liability certificate before Google will approve you. Where moving leads come from.

The short version

Labor-only and single items while you set up. General liability before the first full move. Cargo with it. Workers' comp before the first employee. Commercial auto the day you own the vehicle. Released value explained in writing on every agreement. And wrap everything, because the claim you never file is the cheapest one.

If you want to check your coverage and your prices against your market, that is part of the strategy call. Thirty-five more questions, including licensing and the LLC, are in the FAQ.