Motor vehicle carriers and several other types of transportation businesses need to have certain documents on file with the FMCSA before receiving operating authority. The type of company and the states in which it operates both factor in the details of the requirements — this article simply provides general information about the rules. Further, insurance company home offices should file certain types directly with the Administration.
These insurance requirements protect the public. They also help create a business and legal atmosphere in which unavoidable incidents do not automatically ruin an otherwise healthy company.
The FMCSA requires motor carriers and freight forwarders to file proof of public liability insurance. This should cover the following:
- Environmental remediation
- Bodily injury
- Property damage
Of course, some freight forwarders do not have any of these risks. Those that do not operate vehicles could apply for a waiver.
Motor carriers and freight forwarders of household goods both need to file proof of cargo insurance. The minimum is $5,000 per vehicle and $10,000 per incident.
Hazmat, bonds, trusts and process agents
There are some additional requirements, some of which are only for more specialized trucking-industry businesses. For example, the FMCSA requires hazmat safety permit carriers to file an endorsement. Brokers and forwarders must show that they hold a surety bond or funds in trust. Finally, all operating authorities need a form for the service of process agents in the event that someone files a legal claim.
Insurance might be helpful in a conflict, but the total cost of legal claims against commercial vehicle operators can be staggeringly expensive. The efficiency with which a company handles a situation tends to make a significant difference.