FMCSA clarifies public liability endorsements

In response to concerns raised by the insurance industry and trucking defense attorneys, the Federal Motor Carrier Safety Administration has clarified that the federal requirement for an endorsement guaranteeing minimum public liability is not intended to force insurance companies or sureties to satisfy judgments against parties other than motor carriers named in the documents. The regulatory guidance, published in the Oct. 5 Federal Register, applies to Forms MCS-90, MCS-90B, MCS-82 and MCS-82B.

A petition for rulemaking on the scope of the MCS-90’s application was filed more than two years ago by Great West Casualty, Canal Insurance and Carolina Casualty Insurance. The companies said the rulemaking was needed because several court decisions had interpreted the scope of MCS-90 to:

  • Alter the terms of the insurance policies for reasons unrelated to the purposes of the financial responsibility regulations;
  • Impose liability insurance coverage for the benefit of someone other than the motor carrier to whom the MCS-90 was issued;
  • Expand liability insurance coverage in a way that “creates absurd results under the reimbursement provision;”
  • Create inconsistent outcomes depending on whether the MCS-90, MCS-82 or self-insurance is used to show financial responsibility;
  • Confuse financial responsibility with the regulation of insurance; and
  • Create uncertainty for motor carriers and insurers seeking to comply with the federal financial responsibility regulations.
  • To address the problem, the petition sought changes to Form MCS-90, including changing the term “insured” to “named insured” and other ambiguous language, modifying the format and organization of the form and adding several definitions and language clarifying that the MCS-90 does not change the terms of the underlying insurance policy.

    Ultimately, 10 other insurance companies joined the petition, which also was supported by the Trucking Industry Defense Association and several insurance associations.

    In a Sept. 27 letter to Clay Porter, counsel for the petitioners, FMCSA Administrator Annette Sandberg said that the agency shared the concern about possible misinterpretation of the MCS-90 endorsement. “However, we believe that the cases cited in the petition involved somewhat unusual factual situations, and the proposed changes to the MCS-90 endorsement are unnecessary for regulatory purposes.” Instead, Sandberg said FMCSA would deal with the issue in the form of a regulatory interpretation.

    FMCSA’s guidance clarifies that the terms “insured” in MCS-90 and “principal” in MCS-82 are defined as “the motor carrier named in the policy of insurance, surety bond, endorsement, or notice of cancellation, and also of the fiduciary of such motor carrier.”

    For the text of the regulatory guidance and of the petition for rulemaking denied by FMCSA, visit and search Docket No. 22470.