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What is the MCS90 Endorsement for truck insurance?

In 1980, the federal government passed legislation called the Federal Motor Carrier Act that required motor carriers to show proof of financial responsibility to cover claims initiated by third parties. The purpose of the law was to protect individuals from financial loss when involved in an accident with a motor carrier that did not have enough liquid assets to pay personal injury, property damage, and other claims. The act requires all motor carriers to demonstrate proof of the ability to pay up to a statutory minimum.

The MCS90 attaches to an insurance policy

The MCS90 is not truck insurance by itself. Rather, it acts as an attachment to a policy issued by the insurance company of a motor carrier. By issuing the endorsement, the insurance company is stating that the carrier has submitted proof of the ability to meet financial obligations as defined by the 1980 government regulations. The endorsement ensures that insurance regulators have sufficient funds to pay out a defined minimum on a claim for a truck accident in which the motor carrier is at fault.

Situations when the MCS90 will take precedence

Most accidents between a commercial carrier and a private citizen do not require the involvement of MCS90 because the carrier has other resources available or is not entirely at fault for causing the crash. However, it will govern how the parties handle an accident claim in specific situations. These include:

  • The injured party files a personal injury lawsuit against the motor carrier for causing him or her harm while driving a commercial vehicle in a negligent fashion.
  • The existing insurance policy does not offer enough coverage to pay the claim in full.
  • The party claiming damages is someone outside of the motor carrier organization who has the right to expect reimbursement for physical injury, property damage, or environmental restoration.
  • Those damaged by the actions of the motor carrier have no other financial recourse available to pursue a reasonable recovery.

Possible issues for motor carriers

It is essential for motor carriers to understand that the MCS90 by itself does not provide them with insurance coverage in case of a third-party claim. Its sole purpose is to provide public assurance that any person harmed in an accident with a commercial vehicle will receive a minimum financial recovery whether or not the carrier has enough liquid funds available to pay it.

Another potential issue with MCS90 is that it attaches to a motor carrier and not a specific vehicle. In the event of an accident, the law may obligate the insurance company to pay a claim even if the policy specifically excludes accident coverage. However, the insurer does not have a legal duty to defend its client. Another potential issue for motor carriers is that MSC90 gives insurance companies the legal right to seek reimbursement from the insured for any amount that it paid under MSC90 that the carrier’s policy properly excludes.

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