What is MCS-90?

Here are some things you should know about the MCS-90 endorsement and how it can affect a claim after a truck accident.

Liability Insurance for Trucking Companies

Like car owners, trucking companies must have liability insurance. Liability insurance pays claims for bodily injury and property damage when a commercial truck causes an accident.

Since trucking companies often operate across state lines, the rules for trucking company liability insurance are set by the federal government. The Federal Motor Carrier Safety Administration (FMCSA) is the body that sets the insurance requirements for these kinds of interstate trucking companies.

One of these insurance requirements dictates that trucking companies must have the financial ability to cover claims after a truck accident. Truck companies represent to their insurers that they have the required financial resources and the insurance companies in turn issue an MCS-90 endorsement.

This endorsement serves two purposes:

  1. The MCS-90 includes the insurer’s name and the policy number for the trucking company.
  2. The MCS-90 creates a contractual obligation for the insurer to pay claims that are not covered by the trucking company’s policy.

Trucking companies are required by the FMCSA to obtain an MCS-90 endorsement. The MCS-90 is a public document.

What Happens After a Truck Accident?

After a truck accident, your personal injury lawyer will file a claim with the trucking company’s insurer. This claim will include documentation of your medical expenses, lost income, and property losses.

The insurance company will determine whether its insured was negligent in the accident. 

Some ways that a trucking company could be liable for an accident include:

  • If the trucking company failed to maintain the trucks properly
  • If the truck driver violated traffic laws or drove the truck in an unsafe way
  • If the truck was undersized or underpowered for the load
  • If the trailer was improperly loaded (in cases where the trucking company loaded the truck)

The insurer will review the claim and determine whether the claim falls within the scope of the trucking company’s policy. If the claim falls within the scope of the insurance policy and the trucking company was liable, the insurance company will pay your claim. Your lawyer may need to negotiate the amount of the payment, but the insurance company will be responsible to pay the claim if it is covered and the insured is liable.

If the insurer determines that the trucking company is not liable, the insurance company will not pay the claim. For example, if the insurer determines that the trucking company was not negligent or that the truck accident did not cause your injuries, it will deny your claim. Your lawyer will need to file a lawsuit against the trucking company and the insurance company will be forced to defend its determination.

A more difficult case happens when the insurer determines that the trucking company was liable, but the claim falls outside of the scope of the insurance policy. The outcome at this point will depend on whether the insurance company had issued an MCS-90 endorsement.

If the Claim Is Outside of the Policy, But the Insurer Issued an MCS-90 Endorsement

If the insurer issued an MCS-90 endorsement, it is contractually obligated to pay claims that fall outside of the scope of the trucking company’s insurance policy. The insurer does not need to bear the cost of paying the claims.

Under its endorsement, the insurer can seek reimbursement from the trucking company after it pays your claim. But that dispute will be resolved between the trucking company and its insurer and will not involve you.

If the Claim Is Outside of the Policy and the Insurer Did Not Issue an MCS-90

If the insurer did not issue an MCS-90 endorsement and the claim falls outside of the limits of the policy, the insurer will not pay the claim. The insurer will have a justifiable concern about the trucking company’s financial state. This will prevent the insurer from paying the claim and seeking reimbursement from the trucking company.

Denial on this basis places you and your lawyer in a difficult position. The claim will not be paid, and you will need to file a lawsuit against the trucking company to recover compensation.

But the lack of an MCS-90 is often due to the trucking company’s inability to meet the financial responsibility requirements. To meet the financial responsibility requirements, the trucking company must have at least $750,000 in assets, insurance, and surety bonds. Depending on the size of the trucks and the type of cargo the trucks haul, the trucking company might need up to $5 million in assets.

A lack of assets will put you and your lawyer in a difficult position. You will need to file a lawsuit to obtain compensation for your injuries and property losses. But the trucking company did not obtain an MCS-90 endorsement, which means that it might not have any assets. As a result, you might go through the time and effort of a lawsuit, only to find that the trucking company has declared bankruptcy or closed.

If you are put into this position, you might need to act quickly to secure your position as a creditor. A judgment creditor does not rank highly among a business’s creditors. But the quicker you can secure a judgment, the closer you will be to the front of the line when it comes to compensation.

Securing Compensation After a Truck Accident

After a truck accident, you should consider hiring a lawyer. Although the process for seeking compensation after a truck accident is like the process for a car accident, the insurance situation can be much more complicated. Having a lawyer to navigate the process might make the difference between obtaining compensation and receiving a worthless judgment.