July 13, 2016
Understanding MCS90 Insurance
The Motor Carrier Act was developed and passed in 1980. This act was passed by the US Congress in an effort to lessen the large number of regulations that were required of for-hire motor vehicles. The aim was to allow competition among transportation companies. Price competition allowed carrier companies to publish and use their desired rates with regard to freight hauling. In the past they were bound to use the figures passed by the rating bureau.
Before we talk about it in depth, there are a few things that one should consider. The motor carrier may decide to self-insure the company. Doing so, the motor carrier states that they have financial responsibility to cover claims that are caused by negligence and that they are liable to pay the amount. The motor carrier may avail of a surety bond as proof of financial responsibility. This serves as a promise that the party will pay in behalf of them if they are unable to pay the required amount. The motor carrier may also choose to avail of insurance from the standard market. Now when he or she decides on standard insurance, that is when the MCS90 will be needed.
This is Not Insurance
Many people think that the MCS90 is insurance. This misconception will cost them if they plan to enter the transportation industry. The MCS90 insurance is not truly an insurance policy but more like proof of financial responsibility. Please note that while the Act was meant to ease regulations. However, it poses additional requirements on motor carriers that are used to transport property.
The MCS90 endorsement is required proof to show that the motor carrier complies with federal regulations. Even so, please note that the attachment of the MCS90 insurance to the business automobile policy does not really mean that the motor carrier was able to comply with the minimum level of the financial responsibility requirement. Therefore, this endorsement does not serve as a warranty by an insurer to show that the limits seen are able to meet the federal minimum. It is the obligation of the motor carrier, not the insurer, to be able to determine the required limits of its insurance.
It Applies to Interstate and Intrastate Commerce
The MCS90 states clearly that the federal requirements apply to vehicles based on commodities transported, which includes hazardous materials and substances, even if the said motor vehicle is a private owned one and even if the vehicle was operating through interstate commerce.
With the MCS90 insurance, the insurer should pay according to the terms of endorsement with regard to public liability. This includes incidents that occur caused by negligent operation of the motor vehicle, maintenance and also the use of the motor vehicle subject to the financial responsibility requirements based on this particular Act.
The scope of public liability is quite broad. This includes liability for any bodily injury, damage to property and for environmental restoration. With regard to environmental restoration, the insurer is liable for restitution of loss, destruction or damage to natural resources caused by accidental discharge of the contents transported by the motor carrier into or upon a body of water, watercourse, land or atmosphere.
Environmental restoration shall include the cost and removal required to mitigate or minimize damages tot eh natural environment, human health, fish, shellfish and wildlife caused by the incident. Therefore, the insurer will have to shoulder costs when such an incident should arise.
How to Protect Yourself
For starters, you need to make sure that your motor vehicle’s auto liability policy is inclusive of the CA 9948 Broadened Pollution Liability endorsement. It would also be best to avail of a policy for standalone pollution. This will include site, transit and even operations. These are quite affordable and serve as risk transfer mechanisms. Even so, please keep in mind that it is not just about the cargo but also includes pollution caused by the truck and trailer.
Trust In Reliance Partners
Reliance Partners understands the needs of motor companies and seek to provide them a hassle-free way to insure their carriers. Reliance Partners began in 2009, incorporated when the economy was still on shaky ground. With the goal of providing fair insurance for both commercial and private clients, the company was able to rise up and become one of the leading insurance brokerages in the country.
Reliance partners understands that those in the transportation business require an insurance company that they can rely on, one that will provide them with honest rates and be able to deliver, in situations where they need to step up. This is why Reliance Partners provides their clients with the best coverage possible, insuring that the business owner can go about with his or her transportation business and sleep soundly at night without any worries. If you are in the market for MCS90 insurance, ask for a quote today.