Understanding Three Levels of Hazmat Hauler Environmental Pollution Coverage

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What is the difference between MCS-90, CA-9948, and TPL for Hazmat Hauler Cargo Insurance Coverage?

With roughly one-eighth of all freight hauled in the United States being tanker trucks filled with hazardous petroleum products like gasoline, diesel, and aviation fuel, transporting hazardous materials has many safety risks and unique insurance coverages to offer extra protection for fleets.

While basic auto policies usually cover oil and hydraulic fluid leaks and cleanup costs if the truck rolls during an accident, pollution incidents involving other materials not used in the operation or maintenance of the vehicle are excluded.

A hazmat hauler vehicle accident can result in an environmental pollution hazard and being prepared is critical for companies. 

There are three common solutions available for insuring hazmat hauler pollution exposures, from MCS-90 endorsement, CA 9948 endorsement, and Transportation Pollution Liability (TPL).

But what do they cover and how are they different? Let’s find out.

What is MCS-90 Endorsement?

The MCS-90 endorsement is an FMCSA document which is filed by the insurance company to the FMCSA and proves financial responsibility has been met by the insured.

It is an endorsement in the sense that the insurance company ensures that the underlying policy meets those minimum requirements of the FMCSA, and is required for companies with for-hire interstate transport of goods or passengers.

It can only be filed by an insurance company directly to the FMCSA.

It is not true insurance coverage. Why?

The MCS-90 form requires that the insured reimburse the carrier for: any payment that the company would not have been obligated to make under the provisions of the policy, except for the agreement contained in this endorsement.

For example, in a case where an insurer is required by the MCS-90 to pay damages for environmental restoration and the Commercial Automobile policy to which the MCS-90 is attached excludes pollution, the insurer must still pay for the environmental restoration costs.

While your insured may need this form to complete their filing with the state, motor carriers should have additional environmental coverage solutions to avoid expensive penalties.

What is Broadened Transportation Liability Endorsement (CA-9948)?

Broadened Transportation Liability Endorsement (CA9948) is an ISO form that can be added to an insured’s business auto policy to address environmental liability.

This is a true endorsement which can be provided with an underlying liability policy.

The key takeaway here is that the CA9948, or any environmental liability policy, is not easy to get.

Not every insurance company offers every endorsement just because ISO has a standardized policy. Also, not every broadened pollution endorsement is written with ISO policy endorsement language.

What does this mean?

ISO can be thought of as the think tank for the property and casualty insurance Industry. Many insurers write their own policy language and do not use the ISO policy framework language because they choose to use their own language to moderate risk or provide additional coverage to be more competitive in certain segments.

For example, when you see cut rate liability insurance it is usually never written on with ISO language because they are using more restrictive language to reduce risk and payouts.

But this coverage is important.

The CA-9948 form will typically respond to any claim or suit that holds the insured responsible for:

  • monitoring
  • cleaning up
  • removing
  • containing
  • treating
  • destroying or neutralizing, or
  • responding to the effects of “pollutants”

It is important to note that not every hazmat hauler needs the broadened pollution coverage.

You could, in theory, run for-hire and never need the endorsement because not every broker/vendor requires the coverage.

But if they do require it, there is another important issue to consider.

If your underlying liability insurer does not offer the broadened pollution coverage, you can pretty much be guaranteed no one will offer it to you because it cannot be pieced together from different insurers.

You would need to find an insurer that writes both together.

But wait, there is more.

Hazmat haulers relying solely on CA-9948 for pollution coverage are missing important liability protection for some of the largest and most frequent transportation pollution exposures.

For example, there is a notable gap in coverage for the loading and unloading of materials onto/off the vehicle. The coverage provided by the CA-9948 endorsement does apply, except for the liability assumed under a contract or agreement.

In other words, if the pollution event was caused by the load escaping during the loading process due to shipper negligence, there would not be coverage for the shipper even if the insured held the shipper harmless (in an insured contract).

Or, if the insured dumps a bucket of paint into a watershed while hoisting it into the truck, there is no coverage.

The endorsement provides coverage to the insured but not to any other negligent party even if the insured agreed to under a written agreement to hold them harmless.

This gap can be addressed by Transportation Pollution Liability policies.

What is Transportation Pollution Liability (TPL)?

If the insured has any responsibility beyond hauling the load, has any contractual responsibility, and is under a state law without anti-indemnification provision (at least 42 states have such laws), then a stand-alone environmental pollution policy would be needed.

Transportation Pollution Liability is a comprehensive insurance solution that extends coverage for damages or pollution conditions arising out of the ownership, maintenance use or the entrustment to others of any auto owned or operated by or rented or loaned to any insured.

The definition of use is further amended to include loading or unloading, making this form broader than the CA 9948.

What is fuel haulers/HAZMAT insurance?

Hazmat Insurance can be complicated and hard to find. You need a specialist to review your risk and make sure you have insurance without any coverage gaps at an affordable cost. CNS Insurance specializes in Hazmat Risk.

Our specialists will review your insurance needs and recommend coverages that protect you and your company.

If you have any questions or concerns, please call us at 800.724.5523 or email info@cnsinsures.com.