August 31, 2015

Our insured was driving a gasoline truck on the highway when another car collided with our insured's truck, spilling more than 3,000 gallons of gasoline on the highway. Our investigation shows that our insured was not negligent in his operation, maintenance, or use of his truck.

Our insured has the endorsement MCS 90 to comply with the Motor Carrier Act of 1980. The MCS 90 endorsement states the following: “In consideration of the premium stated in the policy to which this endorsement is attached, the insurer (the company) agrees to pay, within the limits of liability describe herein, any final judgment recovered against the insured for public liability resulting from negligence in the operation, maintenance or use of motor vehicles subject to the final responsibility requirement of Section 29 and 30 at the Motor Carrier Act of 1980.”

Since the purpose of the Motor Carrier Act of 1980 is to protect the public interest, not the policyholder, does the strict liability apply to this claim? If so, how is the coverage under the MCS 90 affected, since the form states that negligence has to be established in order to provide coverage under the form?

Florida Subscriber

The key point in the endorsement is the phrase “resulting from the negligence.…” This means that the payment under MCS 90 will be made only if the insured is legally liable, that is, negligent in the operation, maintenance, or use of the vehicle.

As for the strict liability argument/phrase, this means that no condition, provision, or limitation in the underlying policy or this endorsement relieves the insurer from paying a final judgment. So, for example, if the particular vehicle is not listed as a covered auto or the driver is not listed as an insured, the insurer is still going to have to pay the amount due under MCS 90. There still has to be negligence on the part of the insured in order for MCS 90 to come into play, and if that is the case, the insurer will pay even if some clause or provision or condition in the underlying auto policy would seem to exclude coverage.

The protection of the public interest is the goal of the form, and that is why MCS 90 requires the insurer to pay—if the insured is negligent—even if the insured is bankrupt or insolvent or, as noted, the vehicle is not a listed vehicle.

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