Does Your Commercial Vehicle Policy Have an MCS-90 Endorsement?
Wednesday, November 04, 2015
Posted by: Henry Dunn Insurance
Nearly every company with a commercial motor vehicle (powered units of more than 10,001 lbs Gross Vehicle Weight (GVW) or combined powered units and trailers of more than 10,001 lbs Gross Combined Weight (GCW)) that crosses state lines must have the MCS-90 Endorsement added to its commercial vehicle insurance policy.
Federal regulations require an MCS-90 endorsement required for any commercial motor vehicle (CMV) operated by an insured with motor carrier authority, as well as any private carrier transporting any hazardous materials. Because private carrier includes anyone with a CMV of greater than 10,001 lbs GVW/GCW that hauls his or her own goods, this can apply to a wide variety of insureds operating as private carriers, such as landscaper contractors transporting their own equipment.
The MCS-90 Endorsement does not, in fact, offer any additional coverage. It is a federally mandated form that guarantees financial responsibility for any loss caused to the general public or the environment, such as for pollution cleanup.
With the MCS-90, the insurance carrier is guaranteeing that coverage up to that limit extends to clean up of a pollution incident, even if you have no pollution coverage. However, it also gives the insurance carrier the right to seek reimbursement from you for any cleanup costs for which you do not have coverage.
Under Federal Motor Carrier Safety Administration Regulation §387.9 - Financial responsibility, minimum levels, the U.S. Department of Transportation lists gasoline as a hazardous material. The regulation requires for-hire and private motor carriers transporting any quantity of oil in interstate or foreign commerce to have a minimum of $1,000,000 of financial responsibility coverage. The Clean Water Act of 1973, as amended, declares that gasoline is an oil. The $1,000,000 coverage also applies to for-hire and private motor carriers transporting gasoline in bulk in intrastate commerce. C
Consequently, a gas-powered weed trimmer in a Ford F-350 or a Ford F-150 with a trailer, and crossing state lines, is likely required to carry a MCS-90 endorsement showing $1,000,000 million combined single coverage showing $1,000,000 combined single coverage on their policy. Failure to have the coverage form or the required minimum limit can expose your company to fines of up to $11,000 per day.
Be sure to discuss your individual needs and requirements with your insurance agent or carrier.
Article provided courtesy of PLNA Partner Henry Dunn Insurance