Keep on Truckin’: Indiana Applies MCS-90 Endorsement to Intrastate Trips


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The Court of Appeals of Indiana recently ruled that, in Indiana, Form MCS-90 endorsements on insurance policies apply to purely intrastate trips, including when the vehicle is on the way to pick up cargo but has not yet done so at the time of an incident.

MCS-90 endorsements, which are required by the Federal Motor Carrier Safety Administration, are obtained by interstate motor carriers to meet the minimum levels of financial responsibility ($750,000 for standard transportation and $5 million for the transportation of hazardous materials) required by the Motor Carrier Act of 1980 (MCA). In issuing an MCS-90 endorsement the insurer “agrees to pay… any final judgment recovered against the insured for public liability resulting from negligence in the operation of motor vehicles…regardless of whether or not each motor vehicle is specifically described in the policy.” Accordingly, if an MCS-90 endorsement applies, the insurer may be liable for any final judgment even if the specific vehicle involved in the accident is not listed on the policy.

In Progressive Southeastern Ins. Co. v. B&T Bulk, LLC, No. 20A-CT-1765, 2021 Ind. App. LEXIS 136, the Court of Appeals of Indiana addressed multiple issues related to the MCS-90 endorsement. The underlying cause of action involved B&T Bulk, LLC (B&T), an Indiana trucking corporation with an insurance policy provided by Progressive Southeastern Insurance Company (Insurer). The policy included an MCS-90 endorsement in compliance with the MCA. On December 4, 2017, B&T’s employee drove a semi-truck and trailer to pick up a load of concrete within Indiana on a purely intrastate trip. The semi-truck and trailer were not specifically listed on the policy. On the way to pick up the load, the truck crossed the median, striking and killing another driver on State Road 25.

The deceased’s estate initiated a wrongful death action against B&T. B&T turned to Insurer to defend and indemnify B&T. Insurer moved for a declaratory judgment that: 1) it did not have a duty to defend and indemnify B&T since the vehicle was not listed specifically on the policy; and 2) its exposure was limited to the extent of the MCS-90 endorsement’s application to the incident on December 4. Following a motion for summary judgment, the trial court found that Insurer did not have a duty to defend/indemnify B&T, but that the MCS-90 endorsement applied to the incident—making Insurer liable for any final judgment. Insurer appealed citing two arguments: 1) because the incident occurred during an intrastate trip, not an interstate trip, the requirements of the MCA did not apply and 2) the MCS-90 endorsement did not apply because the vehicle had not yet picked up the cargo prior to the accident and was not “transporting property.”

Regarding the first argument, the court agreed that “most courts—including the federal circuit courts that have addressed the issue—have held that the MCS-90 endorsement does not apply to accidents that occur during a purely intrastate trip.” However, the court noted that the Indiana General Assembly incorporated the minimum financial responsibility requirements of the MCA into state regulations applicable to intrastate trips. Specifically, Indiana Code section 8-2.1-24-18(a) states: “[the MCA regulations] are incorporated into Indiana law by reference, and…must be complied with by an interstate and intrastate motor carrier of personal property throughout Indiana.” The court noted that in Sandberg Trucking, Inc. v. Johnson, 76 N.E.3d 178 (Ind. Ct. App. 2017) the court found that “the legislature’s intent was to apply the regulation to intrastate motor carriers given its explicit inclusion of ‘intrastate’ in the statute and that to hold otherwise would be absurd.” As such, the court found that the MCS-90 endorsement applied to the intrastate trip at issue here.

The court also rejected Insurer’s second argument: that the vehicle was not engaged in the transportation of property at the time of the incident since it had not yet picked up the cargo. The court turned to Titan Indemnity Co. v. Gaitan Enterprises, Inc, 237 F. Supp. 3d 343 (D. Md. 2017), which found the relevant statute defines transportation “exceptionally broadly to include ‘services related to’ the movement of property.” In Titan, the incident occurred while the vehicle was in line to pick up the load but had not yet done so. The B&T Bulk, LLC court found the analysis from Titan also applied here, stating that “travel from a trucking facility to a customer location to pick up a load is a ‘service related to’ the transportation of property.” Finding against both of Insurer’s arguments, the court affirmed the trial court’s grant of summary judgment.

Subrogation professionals should always be mindful of state statutes regarding MCS-90 endorsements. While the MCS-90 endorsement applies to interstate travel, the applicable state legislature may have adopted the same standards applicable to interstate travel to intrastate travel. Further, courts may broadly define transportation to include occasions where a driver is en route to pick up a load but has not yet done so when an incident occurs. Finally, subrogation professionals should be mindful of the unique nature of the MCS-90 endorsement, whereby an insurer can, ultimately, be found financially liable even if the specific vehicle is not covered and/or listed on the insurance policy.

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