Question
Since I consider this to be important, I will use my “Can you hear me now” method and post the topic on various Forums.
Once again a carrier was thrown to the lions by their insurance underwriter. A carrier that transported hazmat and required $1,000,000 of insurance was investigated for insufficient insurance as the company’s insurance on file with the FMCSA listed $750,000 of insurance.
Upon arrival at the carrier it was discovered the carrier had a $1,000,000 policy; however, the insurance underwriter issued a MCS Form 90 for $750,000.
The carrier was cited for the critical violation of 49 CFR Part §387.7 failing to have proof of the levels of financial responsibility at their primary place of business..
Despite multiple requests by the carrier for a MCS Form 90 for the full amount of $1,000,000 the underwriter failed to respond by the closeout of the review. The review commenced on 02/05 and closed on 02/09/2007. The carrier now has 10 days to provide a MCS Form 90 with the required $1,000,000 or face additional penalties.
FYI, the underwriter is Carolina Casualty.
It is imperative that motor carriers examine their MCS Form 90 and ensure the document list the amount of insurance paid for. If the document does not reflect the amount of insurance paid for, request a revised MCS Form 90 with the proper amount. If the underwriter fails to respond then cancel the policy and request a different underwriter.
The MCS Form 90 is a legal document that forces the underwriter to pay for environmental restoration for the amount of insurance the carrier has, i.e. $750,000, $1,000,000 or $5,000,000.
Carriers that are required to have $5,000,000 often have multiple polices, i.e. $1,000,000; $2,000,000 and $2,000,000. The carrier would now have three MCS Form 90s to reflect each policy.
Carrier beware, service providers that fail to provide the required legal documents are a liability to your company. The service provider’s failure to provide the level of service deserved affects your company. Ensure you receive the service you paid for.
Be safe."If men were angels...No government would be necessary."
51st Federalist Papers
"Nichols' Fourth Law says, "Avoid any action with an unacceptable outcome"
Answer
I’ll call this ”Now the rest of the story.”
Some underwriters are only providing carriers a MCS Form 90 listing the level of financial responsibility listed on the License & Insurance web site based on the carrier’s US DOT number. If a carrier applied for a MC number and did not list HM mandating $1,000,000 of insurance then the system defaults to $750,000. IOW, if the carrier purchased $1,000,000 of insurance and the carrier did not choose HM on their OP-1 mandating $1,000,000 of insurance be filed with the FMCSA, the carrier will have an insurance portfolio listing $1,000,000; however; the License & Insurance web site and MCS Form 90 will only list $750,000.
When carriers fill out their OP-1 for their MC number there are several different options. If a carrier transports ANY QUANTITY of hazardous materials the carrier must have $1,000,000 of insurance. Any quantity of HM includes a one time shipment of a five gallon can of petroleum based paint.
Part 387.9
It should be noted some trade materials transported, i.e. paint, thinner, brake cleaners, etc., maybe hazardous materials mandating the $1,000,000 of insurance.
People should be aware of what they transport, during a roadside inspection the officer will make a note of any HM discovered. Once HM is discovered the $1,000,000 takes affect. Operating without the required level of insurance is an acute violation and will more than likely end up with penalties. Failing to have the required proof of financial responsibility (MCS Form 90) at the primary place of business is a critical violation and may result in penalties.
Carriers are responsible for their compliance with the FMCSR. The FMCSA does not regulate the insurance companies except to mandate they file insurance and notify the FMCSA of any cancellation of insurance. Carriers would be wise to review their insurance documents and ensure the MCS Form 90 reflects the amount of insurance they paid for. Carriers may change their insurance associated with the MC number by filing a modified OP-1.
Be safe."If men were angels...No government would be necessary."
51st Federalist Papers
"Nichols' Fourth Law says, "Avoid any action with an unacceptable outcome"