What is the MCS-90 and Who Needs One?
It’s critical that motor carriers and the owner operators involved with carriers understand the import of the MCS-90 endorsement. After all, misunderstandings pertaining to the MCS-90 have been known to lead to allegations against agents, bad faith claims, and crippling uninsured loss.
The MCS-90 is an important endorsement that must be filed in many instances, but due to the nature of the endorsement, it’s highly understandable for owner operators in the trucking industry—as well as their motor carriers— to harbor some questions and points of confusion regarding this filing. Let’s take a look together in an attempt to “unmask” the MCS-90.
Just What Is the MCS-90, And What Is It Not?
The United States Congress passed the Motor Carrier Act of 1980 in an attempt to introduce price competition for motor carriers in an effort to encourage competition in the industry. Additionally, the Motor Carrier Act of 1980 was designed to limit the number of regulations for motor carriers, although it also introduced some new stipulations. One of these stipulations is designed to ensure that all motor vehicle owners operating under a motor carrier possess the “minimum levels of minimum responsibility” as it pertains to financial responsibility. That, in a nutshell, is what the MCS-90 is. It’s established proof of financial responsibility by the motor carrier and their owner operators, and on behalf of the public. The MCS-90 establishes legal responsibility.
However, here’s where it gets a little tricky: It’s important to understand that the MCS-90 is not an insurer warranty. The insurer does not decide upon the limits of insurance in this instance. Instead, it is an endorsement that assists in allowing the motor carrier to reach federal minimums of insurance requirements. The MCS-90 acts as a financial assurance from the motor carrier on behalf of the public. However, while it is required in many instances, it does not in itself prove that the motor carrier has met minimum levels of financial responsibility as determined federally.
When an insurer issues the MCS-90 to a motor carrier, the insurer becomes responsible for paying out for public liability, as detailed in the endorsement. Public liability includes environmental restoration, any property damage, and of course, any injury to the body.
Which Carriers Are Required to File a MCS-90?
Another common misconception regarding the MCS-90 endorsement that we must clear up right away: It is not only required for interstate commerce. Many carriers and owner operators may believe this to be the case, but it is not so. Instead, per federally outlined requirements, the MCS-90 endorsement is required for motor vehicles operating in both interstate and intrastate commerce, depending on what is being transported. This includes private vehicles that are not for-hire. Thus, even if you are a private company operating within your state’s borders, you will still need to have an MCS-90 endorsement attached to your insurance policies depending upon the commodity you are transporting (such as a hazardous material).
Also, bear in mind that the MCS-90 endorsement is not filed directly with the Federal Motor Carrier Safety Administration (FMCSA). Instead, a BMC-91 or BMC-91X is sent to the FMCSA by an insurance company on behalf of the motor carrier. Either of these filings serve as notice that the insurer has provided a MCS-90 endorsement to the motor carrier.