The MCS-90 Endorsement: What Is It?
Trucking companies can face significant financial risks if accidents occur. The accidents can lead to catastrophic injuries and major property damage. As a result, trucking companies require comprehensive insurance. Otherwise, without a high level of protection from insurance, after one accident, a trucking company could easily go into bankruptcy.
There’s something called MCS-90 insurance endorsements to be aware of. Insurers use MCS-90 insurance endorsements to record the financial status of the insured so that claims can be more effectively paid.
Without this endorsement, a settlement to someone involved in an accident, or the surviving family members, could be delayed. Without the endorsement, it’s also more likely that if someone is involved in a trucking accident, they would be forced to file a lawsuit to get compensation.
The following are some things that drivers, trucking companies, and anyone on the roadways should know about this endorsement.
Understanding Truck Accident Liability Insurance
Liability insurance for truck accidents works somewhat differently than typical car accident insurance.
There are inherent differences in an accident involving a truck compared to one just involving standard vehicles.
For example, a fully-loaded commercial truck can have a weight that’s anywhere from 20 to 40 times more than your vehicle. Trucking companies are liable for damages when drivers behave negligently. These companies are also responsible if they are negligent in hiring, training or drug testing of drivers.
For companies operating between states, they require specific insurance policies that will cover the activities of drivers anywhere they’re operating.
Due to all the significant risks, insurance policies that trucking companies have to carry are federally regulated.
An Overview of the MCS-90 Endorsement
The MCS-90 endorsement is something required by the Federal Motor Carrier Safety Administration (FMCSA). All MCS-90 filings are publicly available by the FMCSA online.
Using this form, when necessary, an accident attorney can figure out some critical pieces of information including the insurance carrier and policy number of the trucking company. An attorney can also determine the policy limits of the liability coverage held by the trucking company and gain access to a legally binding assurance the company meets the mandated financial requirements.
According to the Federal Motor Carrier Act of 1980, every motor carrier participating in for-hire interstate commerce has to show proof they have the financial responsibility that’s equal to or more than each state’s minimums.
There are three general ways to show this.
You can self-insure if you’re a motor carrier. That means that if one of your drivers was in an accident and claims were arising due to negligence, the company is required to pay.
Another option is to provide a surety bond. A surety bond promises that one party will pay on behalf of another if they don’t pay.
The third option, which we’ve primarily talked about above, is getting insurance through the standard marketplace. It’s this third option where the MCS-90 endorsement is relevant.
In the simplest terms, the MC-90 guarantees there will be funds to cover a loss if the insured party is found legally liable. The guarantee's idea is to assure the public they won’t face financial consequences if the carrier doesn’t have required minimums.
What Happens With a Claim After a Truck Accident?
If a truck is involved in an accident and someone files a claim, the trucking company’s insurer will investigate the claim. The investigation is a time to determine whether there will be coverage of the claim under the insurance policy and the trucking company's liability as far as the cause of the accident.
Investigations will also look at the value of a claim based on documented damages.
If the policy of the trucking company covers a claim, then the company pays the claim, eventually.
There are situations where a claim could be outside policy terms, however.
For example, the policy might not list the truck as a covered vehicle, or it might not include the driver as a covered party. The policy might not cover the cargo of the truck, or the location.
The trucking company’s insurer will try and deny the claim, but if the trucking company files an MCS-90, then the insurer and the trucking company will deal with this fight.
Finally, if there’s an MCS-90 filed, the truck company has the finances to cover the claim, and the insurer will usually payout even if the claim falls outside the scope of the claim.
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