One major cargo loss can cost hundreds of thousands of dollars. Without the right insurance, one uncovered claim can shut down your business.
If you run a transportation company in Quebec, you face real risks every day. Whether you operate one truck or manage a fleet, you need transportation insurance that protects your vehicles, your cargo, and your business.
This guide breaks down the 10 most important insurance policies for transportation companies in Quebec. Each one plays a role in protecting your business from major financial loss.
1. Commercial Auto Insurance (Q.P.F. No. 1)
Commercial Auto Insurance, officially called Quebec Policy Form No. 1 (Q.P.F. No. 1), is the foundation of protection for any transportation business. It is mandatory for every commercial vehicle operating in Quebec.
This policy covers the major risks you face on the road. It pays for property damage you cause to others, bodily injuries outside Quebec, collision damage to your own trucks, and losses such as theft, fire, and legal defense costs after an accident.
Many business owners still assume the Société de l'assurance automobile du Québec takes care of everything.
It does not.
The SAAQ public plan provides injury benefits to Quebecers, but it does not protect your business from lawsuits if you cause an accident outside Quebec. It does not pay for property damage, accidents outside the province, or any damage to your own vehicle. This gap can be costly if you are not insured under Q.P.F. No. 1.
Imagine your truck hitting a storefront in Ontario during a delivery. The repair bill is $75,000. SAAQ will not cover it because the accident happened outside Quebec, and it involves property damage. Without commercial auto insurance, that bill comes straight out of your pocket.
This coverage is essential for long-haul trucking companies, local delivery services, couriers, moving companies, fleet operators, and owner-operators with a commercial license.
For proper protection, transportation businesses are usually required to carry $2,000,000 in liability for operations in Quebec, $2,000,000 for interprovincial operations, and $5,000,000 when running cross-border trips into the United States.
2. Motor Truck Cargo Insurance
Motor Truck Cargo Insurance is important if you haul goods for customers. It protects the freight you carry, not the truck itself. This coverage pays for customer goods damaged in a crash, stolen, burned in a fire, or spoiled due to refrigeration failure. It also helps cover cleanup costs after cargo spills on the highway.
Many owners do not realize that Commercial Auto Insurance and Cargo Insurance are two separate policies. Auto insurance covers the truck. It does not cover what is inside it. If a customer’s shipment worth $150,000 is damaged or destroyed, you are responsible for the loss unless you have cargo insurance.
For instance, you might be hauling pharmaceutical products worth $200,000 from Montreal to Toronto. Your truck rolls over on Highway 401, and the entire load is destroyed. Without cargo insurance, you must pay the full $200,000 plus legal costs.
This coverage is essential for any business that transports goods for customers. That includes food transporters with refrigerated units, electronics and high-value product carriers, pharmaceutical haulers, and freight operations of any size.
Cargo insurance comes in several forms. All-risk coverage offers the broadest protection and covers all perils except exclusions. Named-perils coverage is more affordable but only covers specific risks like fire, collision, and theft. If you haul refrigerated goods, reefer breakdown coverage is a must.
Read More: 7 Ways to Lower Your Commercial Truck Insurance Costs in Québec
3. Commercial General Liability (CGL)
Commercial General Liability insurance is strongly recommended for all transportation businesses. It protects you when injuries or property damage happen away from your vehicles, such as at your office, yard, warehouse, or a customer location. This includes slip and fall accidents, damage caused during loading or unloading, injuries linked to your business activities, and legal defence costs.
Many owners assume their auto insurance covers these situations. It does not. Auto insurance only applies when your vehicles are on the road. Any incident that happens at your premises or at a customer site requires CGL coverage.
For instance, a client visits your Montreal dispatch office and slips on icy stairs, breaking their arm. Medical bills and lost wages total $45,000. They sue your business. Your commercial auto policy will not respond because a vehicle was not involved. CGL insurance covers the transportation insurance claim and legal costs.
This coverage is important for warehouse operators, distribution centres, businesses with offices or yards, companies that load or unload at customer sites, and moving companies that work inside customer properties.
Most companies carry $2,000,000 for each claim and $5,000,000 in total coverage for the year.
4. Warehouseman's Legal Liability
Warehouseman’s Legal Liability insurance is essential and often required by contract if you store customer goods, even for a short time. It protects inventory at your facility against losses such as fire, theft inside the warehouse, and water damage.
Many owners assume cargo insurance will cover stored goods, but it will not. Cargo insurance only applies when goods are in transit on your vehicles. Once a load is off the truck and inside your building, cargo coverage ends.
For instance, you run a cross-dock facility in Laval and hold customer goods overnight. A fire destroys your building and $400,000 of stored inventory. Because the goods were not on a vehicle, your cargo policy denies the claim. Without Warehouseman’s Legal Liability insurance, you are responsible for the full loss.
This coverage is essential for cross-dock and transload facilities, businesses that store goods overnight, bonded warehouses, and any operation that holds customer goods on site.
5. Non-Trucking Liability (Bobtail Insurance)
Non-Trucking Liability, often called bobtail insurance, is typically required by the carrier for owner-operators. It protects you when you use your truck for personal or non-business driving, such as going home after a delivery, running errands, or driving without a trailer.
Many owner-operators believe the carrier’s insurance covers them at all times. It does not. A carrier’s policy only applies when you are under dispatch. Once you drive the truck for personal use, their coverage stops. Without bobtail insurance, you have no protection.
For instance, you are leased to a carrier and finish a delivery in Quebec City. You drive your truck home to Montreal and cause an accident on the way. The damages total $300,000. Because you were not under dispatch, the carrier’s insurance does not cover it. Without Non-Trucking Liability insurance, you must pay the full amount.
This coverage is important for owner-operators leased to motor carriers, independent truckers who use their truck personally, and contract drivers working under a carrier’s authority.
6. Umbrella and Excess Liability
Umbrella and Excess Liability insurance is recommended for transportation companies that operate in the USA, run larger fleets, or haul high-value cargo. It adds an extra layer of protection when a major claim goes beyond your primary policy limits.
This coverage becomes critical in serious accidents. Injuries and multi-vehicle crashes can easily exceed the standard $2,000,000 limit on commercial auto or general liability policies.
For example, your truck causes a multi-vehicle accident in the USA and the lawsuit settles for $6,000,000. Your commercial auto policy pays $2,000,000. Without umbrella insurance, you are responsible for the remaining $4,000,000.
This policy is especially important for USA operations, HAZMAT carriers moving dangerous goods, fleets with ten or more vehicles, and companies hauling loads worth more than $100,000.
7. Trailer Interchange Insurance
Trailer Interchange Insurance is mandatory if you use trailers under interchange agreements. It protects trailers you do not own but are responsible for while they are in your possession. This includes collision damage, theft, fire, and vandalism.
Many carriers do not realize that their commercial auto policy will not cover a trailer they do not own. When you haul a trailer under an interchange agreement, you are legally responsible for any damage. Without this coverage, repair or replacement costs come out of your pocket.
For example, you operate under a trailer interchange agreement and back into a dock in Longueuil, damaging the trailer. Repairs cost $35,000. Since you do not own the trailer, your commercial auto policy will not cover it. Trailer Interchange Insurance pays for the damage.
This coverage is important for trucking companies that use interchange trailers, businesses hauling leased or borrowed equipment, and intermodal carriers handling shipping containers.
8. Pollution Liability Insurance
Pollution Liability Insurance is mandatory for fuel, chemical, and hazardous material haulers. It covers environmental cleanup from accidental spills, government fines and penalties, third-party property damage, and legal defence for pollution claims.
Standard commercial auto and general liability policies exclude pollution claims. If you haul anything that can contaminate the environment, you have no protection without this policy.
For example, your tanker truck carrying diesel fuel overturns on Highway 40 near Montreal and the spill reaches a nearby stream. Cleanup costs $1,800,000, and government fines add $250,000. Without Pollution Liability Insurance, you pay more than $2 million out of pocket.
This coverage is essential for fuel haulers, petroleum transporters, chemical carriers, tanker operators, and any business hauling hazardous substances.
9. Cyber Liability Insurance
Cyber Liability Insurance is recommended for any modern transportation business. It protects you from data breaches, ransomware attacks, and cyber-related shutdowns. This coverage pays for data recovery, ransomware payments, lost income, legal defence for privacy violations, and the cost of notifying affected customers.
Standard insurance does not cover cyber risks. Today’s trucking operations rely on fleet management software, ELDs, GPS tracking, and digital customer records, which creates vulnerabilities that require dedicated protection.
For example, hackers break into your fleet management system and steal customer data. You must notify 500 customers, hire cybersecurity experts, and prepare for lawsuits. Total costs exceed $150,000. Without Cyber Liability Insurance, you pay these expenses while your operations are disrupted.
This coverage is important for companies using fleet management or ELD systems, storing customer data digitally, accepting online payments, or running computerized dispatch systems.
10. Business Interruption Insurance
Business Interruption Insurance is recommended for all transportation businesses. It helps your business stay financially supported when a disaster forces your operations to shut down temporarily. This includes help with lost income, truck payments, insurance premiums, employee wages during downtime, and temporary facility costs while you rebuild.
The main problem is cash flow. When you cannot operate, money coming in slows down or stops, but your expenses continue. Truck payments, insurance, wages, and facility costs still have to be paid. Without this coverage, many companies struggle to keep up and risk closing permanently.
For example, a fire destroys your terminal in Montreal and you cannot operate for three months during rebuilding. You lose $250,000 in revenue and still owe $180,000 in ongoing expenses. Business Interruption Insurance helps cover both amounts and keeps your business stable until operations resume.
This coverage is important for transportation companies vulnerable to shutdowns, businesses with high fixed expenses, and operations without large emergency cash reserves.
Conclusion
Running a transportation business in Quebec comes with real risks, and the right insurance is essential. One uncovered claim can be enough to shut a business down.
All transportation businesses require Commercial Auto Insurance. If you move goods for customers, you also need Motor Truck Cargo Insurance. Commercial General Liability is equally important for accidents that happen off the road. Depending on your operation, you may also need additional protection such as warehouseman’s liability, bobtail insurance, or pollution liability.
Review your current policies against the insurance types in this guide. You do not want to discover you’re underinsured during a claim, when costs are already piling up.
Qubit Insurance is an AMF-certified independent brokerage in Montreal specializing in Quebec transportation insurance. Contact us for a free consultation.
Frequently Asked Questions
Q: What is the minimum insurance I need for a trucking company in Quebec?
You need Commercial Auto Insurance (Q.P.F. No. 1) with $2,000,000 liability. If you haul goods for customers, you also need Motor Truck Cargo Insurance. Commercial General Liability is strongly recommended for non-driving accidents.
Q: How much does transportation insurance cost in Quebec?
Costs depend on your cargo, driver experience, operating area, fleet size, PEVL record, and claims history. An independent broker can give you accurate pricing for your operation.
Q: What's the difference between cargo and auto insurance?
Commercial Auto Insurance covers your truck. Motor Truck Cargo Insurance covers the goods inside your truck. They are separate policies and most carriers need both.
Q: Do I need insurance if I only haul locally in Montreal?
Yes. You still need Commercial Auto Insurance for property damage liability. If you haul customer goods, you also need Cargo Insurance. General Liability Insurance protects you if accidents happen at your location or at customer sites.
Q: Can I lower costs without reducing coverage?
Yes. Keep your PEVL clean, hire experienced drivers, use telematics and cameras, invest in safety training, choose higher deductibles, bundle your policies, and work with an independent broker.
Q: What happens without proper insurance?
You're personally liable for all damages and legal costs. Courts can seize your business and personal assets to pay claims. Most underinsured transportation businesses declare bankruptcy after one serious accident.
