FMCSA MOTOR CARRIER REQUIREMENTS

Individuals and businesses that operate trucks and buses which transport cargo or passengers are heavily regulated. Some of these regulations have a direct impact on liability insurance because of financial responsibility requirements. The Department of Transportation (DOT), Federal Motor Carrier Safety Administration (FMCSA), headquartered in Washington, D.C, issues these regulations. Liability coverage or surety bonds may be used to satisfy financial responsibility requirements.

The Motor Carrier Act Of 1980 regulates motor carriers that transport property. The Bus Regulatory Reform Act Of 1982 regulates motor carriers that transport passengers. Both have been revised and amended since being introduced, and a complete description of the rules and regulations of each are available on the DOT Website.

Motor carriers subject to the regulations include the following:

• Individuals and businesses for hire that transport property across state lines or to foreign countries on trucks having a Gross Vehicle Weight (GVW) that exceeds 10,000 pounds
• Trucks that transport hazardous material anywhere, regardless of GVW
• Any motor vehicle for hire that transports passengers across state lines or to foreign countries.

Motor Carrier Act Insurance Requirements

MCS–90, Endorsement for Motor Carrier Policies of Insurance for Public Liability under Sections 29 and 30 of the Motor Carrier Act of 1980 must be attached to the applicable commercial auto coverage. The federal government developed it and does not allow it to be modified. Because it is not specific to a particular coverage form or policy, it can also be added to any commercial auto liability or umbrella liability coverage form or policy.

There are four classifications of financial responsibility depending on the commodity being transported and the type of carriage.

Main Features of Endorsements MCS–90

It amends the coverage form or policy to comply with the federal regulations that apply. It is very broad and applies to all of the named insured's owned vehicles, whether listed or not. It obligates the insurance company to pay losses that the coverage form normally excludes, but it also obligates the named insured to reimburse the company for such payments made. The key element is protecting innocent third parties. The injured party is made financially whole after a loss, and the named insured and the insurance company work out the details.

This endorsement insures against bodily injury and property damage, but injuries to employees and damage to cargo are excluded. It may provide coverage on a primary or excess basis. If the coverage is primary, there is a maximum per-accident limit. If the coverage is excess, both the maximum limit and the underlying limit that must be exceeded before coverage is triggered are indicated. The named insured must have a combination of primary and excess limits that meets or exceeds the required minimums.

This endorsement can only be cancelled by providing 35 days notice of cancellation to both the named insured and the federal government.