Commercial Policies And Coverage On Pickups

Lots of business owners in Grand Prairie, Mesquite, Arlington, Fort Worth, Aledo, or any other town in Texas are going to have insurance coverage for the vehicles they use in their businesses. The question is: Do they have the right coverage for the vehicles?
The United States District Court, Southern District of Texas, issued a judgment on April 21, 2010 that addressed this issue. In this case, United States District Judge, Lynn N. Hughes, ended up telling one business that they did not have the insurance coverage they thought they had. The style of the case is, Canal Indemnity Company v. Williams Logging and Tree Services, Inc. et al.
Willie Williams owns a logging company, Williams Logging and Tree Services, Inc. One morning he was driving his company car, a 2003 GMC Sierra pickup, when he hit a motorcyclist. The injured man sued Williams in the 278th District Court, Walker County, Texas.
The title for the pickup is in Williams and his business name. Williams drove the truck to work and carrried tools and fuel in it for vehicles at work sites. He insured the pickup with a $50,000 per person accident policy. This policy paid in full.
Williams business, Williams Logging and Tree Services, Inc., also had purchased a surplus liability coverage policy with Canal Indemnity Company with a policy limit of $1,000,000. The Canal policy covered vehicles listed in the policy. The pickup was not listed. Logging argued that while the pickup was not listed, the attached MSC-90 endorsement and Form-F endorsement obliged Canal to pay.
The MCS-90 is a public liability endorsement that interstate motor carriers are required to have and proof that the carrier has the required minimum level of insurance.
The pickup, though, does not transport cargo for hire as contemplated in the Motor Carrier Act and regulations of the Federal Motor Carrier Safety Administration. While Logging’s hauling trucks may be regulated by the Act, the pickup does not transport items for compensation. It transports Williams as a cost doing business. The fact that Logging has some fuel in cans or even tools to service other vehicles does not transform this “company car” into a motor vehicle.
Form F is the Texas state counterpart to the MCS-90. Texas law requires that motor carriers operating in the state have minimum bodily injury and property damage liability insurance. This law is Texas Transportation Code Annotated, Section 643.101. The law defines a commercial motor vehicle as one that is above 26,000 pounds, transports more than 15 people, or transports hazardous material. See Section 548.001 and 43 Texas Administrative Code, Section 18.2(6). The minimum insurance required is $500,000, per 43 Texas Administrative Code, Section 18.16(a)(8).
Based on the facts in this case that the pickup does not meet the requirements for the Canal policy to provide coverage, the court ruled against Williams.