12.3 Motor Carrier / Trucking and MCS-90

Motor Carrier vs. Truckers Coverage Form

Businesses that transport goods or passengers for others face exposures the standard BACF does not fully address. ISO's Motor Carrier Coverage Form (CA 00 20) is the current form; it largely replaced the older Truckers Coverage Form (CA 00 12). The Motor Carrier form is broader and is used by most trucking operations, including those that lease equipment in and out.

Key vocabulary the exam tests:

• Private carrier — hauls its OWN goods (a grocery chain delivering to its own stores). Usually written on the standard BACF.
• For-hire carrier — hauls OTHERS' goods or passengers for a fee. Subject to federal regulation and the Motor Carrier form.
• Common carrier — a for-hire carrier offering service to the general public.
• Contract carrier — a for-hire carrier serving specific customers under contract.
• Owner-operator — an individual who owns a truck and leases it (and often the driver's services) to a motor carrier.

Trailer Interchange and Hired/Non-Owned Coverage

Truckers frequently swap trailers under interchange agreements. The Motor Carrier form addresses:

• Trailer Interchange — physical damage coverage for loss to a NON-OWNED trailer in the insured's possession under a written interchange agreement. It is selected by symbol and a per-trailer limit.
• Symbol 70-series symbols — the Motor Carrier form uses its own covered-auto symbols (e.g., Symbol 67 'specifically described autos,' 71 'any auto') analogous to the BACF symbols but tailored to trucking.
• The named insured in a lease arrangement is typically the motor carrier; the owner-operator becomes an insured while operating under the lease.

Why Federal Rules Apply

For-hire interstate motor carriers are regulated by the Federal Motor Carrier Safety Administration (FMCSA) under the U.S. Department of Transportation. Federal law requires these carriers to carry minimum financial responsibility so the public is protected when a heavy truck causes harm. This is where the MCS-90 endorsement comes in.

Lessor vs. Lessee and the 'Logo' Liability Rule

Under federal leasing rules, the motor carrier whose name and operating authority (the DOT number and logo) appear on the truck is generally responsible for the vehicle's operation while it is under lease — even if an owner-operator owns the tractor. This is why the motor carrier (lessee) typically carries the primary auto liability and the MCS-90, while the owner-operator may carry bobtail and non-trucking use coverage for times the truck is operated outside the carrier's business (for example, driving the tractor home without a trailer).

Bobtail and Non-Trucking Use

Two exam terms describe the same gap from different angles. Bobtail means operating a tractor with NO trailer attached; deadhead means pulling an empty trailer. The motor carrier's policy usually excludes liability when the truck is NOT being used in the carrier's business, so the owner-operator buys Non-Trucking Use (NTU) or bobtail liability to fill that personal-use gap. Knowing this division of coverage between carrier and owner-operator is frequently tested.

The MCS-90 Endorsement

The MCS-90 (Endorsement for Motor Carrier Policies of Insurance for Public Liability) is a federally mandated endorsement attached to a motor carrier's auto liability policy. It is one of the most heavily tested federal concepts on the P&C exam.

What it does: The MCS-90 is a financial guarantee to the PUBLIC, not coverage for the insured. It promises the insurer will pay any final judgment for BI or PD (and certain environmental restoration) the insured becomes legally liable for, up to the statutory minimum, even if the loss is not covered by the policy (for example, an unscheduled vehicle or a coverage gap).

The reimbursement clause: Because the MCS-90 pays the public for losses the policy did not actually owe, the insurer is entitled to reimbursement from the insured for any amount it pays under the endorsement that it would not have paid under the policy terms.

Federal Minimum Limits

Exam traps: (1) The MCS-90 adds NO coverage to the policy — it only guarantees public payment. (2) The insurer can recover what it paid from the insured. (3) The $750,000 figure is the classic general-freight minimum; do not confuse it with the $1,000,000 hazardous figure.

Filings That Accompany the MCS-90

The MCS-90 endorsement is paired with a Form MCS-90 filing concept and, for many carriers, a BMC-91 or BMC-91X filing with the FMCSA that certifies the carrier maintains the required public-liability insurance. Intrastate carriers may face separate state filings (often called Form E for liability and Form H for cargo in many states). The exam wants you to recognize that the endorsement is part of a federal financial-responsibility system, not a stand-alone coverage grant.

Motor Truck Cargo — A Separate Coverage

Damage to the GOODS the trucker is hauling is NOT covered by auto liability or the MCS-90; it requires Motor Truck Cargo insurance, an inland-marine coverage protecting the carrier's legal liability for loss to customers' freight in transit. Candidates often confuse cargo coverage (the load) with physical damage (the truck) and with the MCS-90 (public bodily injury/property damage) — keep the three exposures distinct: the truck, the load, and the public.