What is the MCS-90B endorsement for passenger carriers?

Who needs it

Federal financial responsibility rules in 49 CFR 387, subpart B, apply to for-hire motor carriers of passengers in interstate or foreign commerce. A NEMT company paid to drive riders from one state into another fits that description. The rules exclude four kinds of service:

• Vehicles carrying only school children and teachers to or from school
• Taxicab service in vehicles seating under 7 passengers, when the cab is “not operated on a regular route or between specified points”
• Vehicles carrying fewer than 16 people on one daily round trip to commute to and from work
• Contract carriers taking students on school-sponsored extracurricular trips

Whether a particular sedan service counts as taxicab service is a question for FMCSA or a transportation lawyer, not a guess. The carrier keeps proof at its principal place of business, either the MCS-90B endorsement from its insurer or an MCS-82B surety bond. Carriers registered for FMCSA operating authority also need their insurer to send a filing to FMCSA, made on Form BMC-91 or BMC-91X. Registration steps are in the DOT number guide.

The minimums

The limit depends on the seating capacity of the vehicle, counting the driver:

The schedule printed on the form is for information only. The form itself says it provides no coverage and that getting the required limits is the carrier’s obligation. Common commercial auto limits of $500,000 or $1,000,000 as a combined single limit fall below that floor, so interstate work usually means buying higher limits or an umbrella. The endorsement can sit on a primary policy or an excess policy.

One detail catches owners out. The standard business auto form raises your limits automatically to meet another state’s compulsory or financial responsibility law while a van is there, but that extension expressly excludes limits set by laws governing motor carriers of passengers. Your policy has to carry the federal amount itself.

What the endorsement promises

The MCS-90B amends the auto liability policy so the carrier complies with the federal rule. In it, the insurer agrees to pay any final judgment against the insured for public liability caused by negligence in operating, maintaining, or using vehicles subject to the requirement. Three features make it stronger than ordinary coverage:

• Any vehicle. It applies whether or not each vehicle is specifically described in the policy, and wherever the negligence occurs.
• No escape clauses. No condition, limitation, or violation of the policy relieves the insurer of paying the judgment, even if the carrier is insolvent or bankrupt.
• Per accident. The limits apply separately to each accident, and a person holding an unpaid judgment can sue the insurer directly.

What it does not do

• It is not coverage for you. As between you and the insurer, the policy’s terms still apply. You must repay anything the insurer pays only because of the endorsement. Sonoma County’s insurance guide sums it up: the endorsement works more like a bond than an insurance policy.
• It excludes your employees. The endorsement’s promise leaves out injury to or death of the carrier’s own employees while they are working. Cargo is excluded too.
• It may not fund your defense. Courts reading the matching MCS-90 truck endorsement have held that it creates no duty to defend on its own.
• It needs notice to end. Either side can cancel with 35 days’ written notice to the other. When the carrier is subject to FMCSA registration, FMCSA must also receive 30 days’ notice.

Crossing state lines raises other federal requirements too, including Unified Carrier Registration. The broker and billing side of those trips is in out-of-state NEMT trips.

Staying insured between renewals

A lapse is the costly mistake with federal filings. HealthRide’s credentials registry keeps each vehicle’s insurance expiration date, sends reminders before renewal, and flags an expired policy before that van is assigned a trip.