Interstate motor carriers must meet financial responsibility requirements. They are required to carry a base level of liability insurance (generally $750,000) to protect the public in instances of personal injury or property damage. The carrier’s insurance company must file an insurance certificate with the U. S. Department of Transportation (“DOT”) confirming the base level of insurance. In addition, the insurer must file an endorsement to the policy (form MCS 90) acknowledging that regardless of the nature of the policy the insurer will defend the carrier against claims and provide the base level of insurance.
In a recent case, the insurer issued a “scheduled auto policy” to the carrier meaning that for a vehicle to be covered it must be listed by the carrier on a declarations page. The insurer filed an insurance certificate and the MCS 90 endorsement with the DOT. The carrier was then involved in a fatality accident, but the vehicle involved was not listed by the carrier on the declarations page. The insurance company refused to cover the accident. The claimants argued that the insurer was required to provide a defense and coverage because the insurer had filed the MCS 90 form.
As it turned out, when the accident occurred the motor carrier was transporting an intrastate load (a shipment from one place in a state to another place in the same state). Under federal law, the MCS 90 endorsement is only triggered where an injury occurs while the carrier is involved in transporting an interstate shipment (a shipment from one state to another state). On appeal, the Supreme Court of Indiana concluded that the insurer was not required to provide coverage for the accident as the involved vehicle was not listed on the declarations page. The motor carrier was left to defend the claim and pay any awarded damages without insurance coverage.
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