Top 5 Insurance Mistakes Moving Companies Make in California

Operating a moving company in California comes with unique risks and responsibilities. From transporting household goods to relocating commercial equipment, movers face potential accidents, theft, and liability claims every day. Insurance is essential to protect both your business and your clients, but many companies make common mistakes that leave them exposed. Understanding these errors can save moving companies significant financial and legal trouble.

1. Skipping Workers’ Compensation Coverage

One of the most common—and costly—mistakes moving companies make is failing to carry Workers’ Compensation Insurance. California law mandates that all businesses with one or more employees maintain coverage, regardless of whether employees are part-time, seasonal, or temporary.

Without workers’ comp, businesses face:

• Heavy fines and penalties from state regulators.

• Exposure to employee lawsuits for injuries on the job.

• Stop-work orders that halt operations until coverage is secured.

For moving companies, employee injuries can occur during lifting, loading, or driving. Not having coverage can lead to expenses that far exceed any short-term savings. Learn more at Workers’ Compensation Insurance California

Relying Only on Minimal General Liability

While General Liability Insurance is a must, some companies carry minimal coverage, thinking it’s sufficient. General liability protects against third-party claims of property damage or bodily injury, such as a client’s property being damaged during a move or a visitor getting injured in a storage facility.

Mistakes include:

• Choosing low coverage limits that don’t match the value of transported goods.

• Not including claims for high-value or specialty items.

• Assuming that other policies will cover liability exposures.

 Movers should explore General Liability Insurance California

Ignoring Cargo or Inland Marine Insurance

Transporting goods—especially high-value items—requires specialised coverage. Many moving companies mistakenly assume that general liability or commercial auto policies will cover cargo in transit.

In reality:

• Standard auto policies usually exclude coverage for transported items.

• Cargo insurance (inland marine) protects items from theft, damage, or loss while in transit.

• High-value or fragile goods like artwork, electronics, or construction equipment require additional protection.

Failing to carry inland marine coverage can result in paying replacement costs out-of-pocket, damaging client trust and your reputation.

4. Not Maintaining Continuous Coverage

Some companies cancel or reduce insurance during off-peak seasons to save money. This is a risky strategy. Even when trucks are parked, equipment can be stolen, vandalised, or damaged by environmental hazards.

Consequences of lapses in coverage include:

• Higher future premiums, as insurers consider businesses with lapses high-risk.

• Loss of protection during unexpected incidents, leaving you liable for damages.

• Legal non-compliance, particularly with mandatory policies like workers’ compensation and commercial auto insurance.

For small and mid-sized movers, a Business Owners Policy (BOP) can provide continuous, bundled coverage at an affordable rate. Learn more at BOP Insurance California

Neglecting Surety Bonds and Licensing Requirements

In California, many moving companies—especially those transporting household goods—must carry a surety bond as part of licensing requirements enforced by the California Public Utilities Commission (CPUC).

Mistakes include:

• Failing to obtain the required bond, resulting in denied licenses.

• Assuming bonding is optional or irrelevant for certain client types.

• Not understanding bond limits, which may leave clients partially unprotected.

Surety bonds protect clients and demonstrate that your business operates responsibly. Details are available at Surety Bond Insurance California

How to Avoid These Mistakes

Moving companies can protect themselves and their clients by:

• Working with a specialist insurance broker – Brokers familiar with moving companies can tailor coverage to your risks.

• Bundling policies – BOPs combine liability and property insurance, often reducing costs.

• Reviewing coverage annually – Adjust policies as your business grows or changes services.

• Investing in employee safety programs – Reduces the frequency and cost of claims.

• Documenting coverage – Provide clients with proof of insurance to build trust and comply with contract requirements.

Final Thoughts

Insurance mistakes can be costly for moving companies in California. From skipping mandatory workers’ compensation to neglecting cargo coverage or bonds, even minor oversights can result in significant financial loss, legal penalties, and reputational damage.

By understanding these common errors and taking proactive steps—such as securing comprehensive policies, maintaining continuous coverage, and consulting with insurance specialists—moving companies can protect their assets, employees, and clients.

For tailored insurance solutions for moving companies, visit Western Insurance