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Trucking accident victims protected by MCS-90 endorsement on truckers’ insurance polcies

As a lawyer handling both sides of injury and death cases for decades, I can’t count the times I have searched for sufficient insurance coverage to cover a client’s loss. In trucking, there is at least an endorsement on the trucking company’s insurance policy that protects the public, even though the insurer may have a right to sue its insured trucking company to get the money back.

49 C.F.R. § 387.7(d) permits a motor carrier to meet its financial responsibility in one of three ways: (1) obtaining liability insurance, including an MCS-90 endorsement; (2) obtaining a surety bond; or (3) obtaining written authorization from the Federal Motor Carrier Safety Administration to self-insure. When a motor carrier opts not to use an insurance policy to meet its financial responsibility requirements, then the regulations do not require the carrier to maintain a minimum of $750,000 in insurance.

In practice, we see policy limits of $1,000,000 more often than $750,000.

The MCS-90 endorsement ensures that a motor carrier has independent financial responsibility to pay for losses sustained by the general public arising out of its operations. The endorsement is designed to protect the public, not the policyholder; the obligation the endorsement creates runs to the public, not to the insured. It seeks to ensure that ultimate responsibility lies with the insured trucking company.

MCS-90 does not provide insurance coverage per se. Rather, the endorsement creates a suretyship and carries with it a right to reimbursement.

MCS-90 endorsement of tractor-trailer liability policy requires the insurer to cover any loss under the policy, irrespective of the amount of the policy’s deductible.

MCS-90 endorsement does not create a duty to defend claims which are not covered by the policy but only by the endorsement, such as a vehicle that was not listed. Thus, a trucking company that violated terms of the policy needs to defend itself since the insurance company may be able to sit back until a judgment is entered, pay under the MCS-90 endorsement, and then sue the trucking company to get its money back.

The plain, unambiguous language of the MCS-90 endorsement recognizes the insurer’s right of reimbursement. The endorsement states, in pertinent part, “The insured agrees to reimburse the company … for any payment that the company would not have been obligated to make under the provisions of the policy except for the agreement contained in this endorsement.” 49 C.F.R. § 387.15 Where policy includes pollution exclusion and insurer pays environmental cleanup costs purusant to MCS-90, insurer entitled to reimbursement from trucking company up to amount of coverage under policy.

The Shigley Law Firm, LLC, in Atlanta, Georgia, practices in the area of trucking litigation. Ken Shigley is on the Advisory Committee of the Association of Interstate Trucking Lawyers of America, former chair fo the Southeastern Motor Carrier Liability Institute, a Certified Trial Advocate of the National Board of Trial Advocacy, and Secretary of the 39,000 member State Bar of Georgia. He handles cases arising from big rig crashes all over Georgia, from Chickamauga to Chamblee, and from Soperton to Snellville.