What are the USDOT Insurance Requirements?
Liability insurance is mandatory for companies that wish to transport people or cargo in the United States. During the 1980s, Congress established the minimum requirements to which operators must comply and these laws place financial responsibility on the operator/carries.
In case you might be asking yourself, this simply means that operators must have sufficient insurance in case of any damages related to the transport of these goods and people. For some industry experts, the minimum requirement is quite low but either way, liability insurance is required in order to obtain a USDOT number from the Department of Transportation.
But who exactly might need USDOT insurance in the first place?
What You Should Know About USDOT Insurance
Motor carriers that transport passengers or hazardous materials are required to apply for a USDOT number. For this reason, most “for hire” vehicles will need to obtain sufficient liability insurance before they can transport people or cargo between states or out of the country. However, many companies will need to request a different scope of insurance when filing for a USDOT number.
For instance, a household goods motor operator is required to have at least $5,000 insurance per vehicle and $10,000 per occurrence, while a freight forwarder will need a surety bond up to the amount of $75,000. Meanwhile, trucking companies are often recommended to obtain more than $1 million in liability insurance and over $100,000 of insurance for the cargo.
As for how you can keep on top of the insurance requirements, it’s best to contact your agent as soon as possible and request the relevant forms so that you can get started. During this process, you will be asked to provide the full address of the business and any failure to provide full details is most likely to result in having your application rejected.
You might also want to take a look through this list of registration forms that cater to various types of registrants and motor carriers. Along with this application, you will also need to provide proof of business address, company contact information, a tax identification number, and a letter on headed paper from your financial institution to request your filer account.
Liability insurance is mandatory for any company that wants to transport goods or people for compensation in the United States. This insurance is required for various reasons and these laws are in place to help protect your company as well as the public.
- Cover the cost of injury to employees, passengers, or a third party.
- Help reduce the number of accidents related to commercial vehicles.
- Apply costs to commercial motor vehicles.
It should also be noted that federal law also states that liability insurance must be obtained within two weeks of filing for an MC number. You will have your application rejected upon any failure to acquire this insurance and the entire process must be started again from scratch. Otherwise, the insurance requirements for USDOT are rather straightforward and a little organization should help you obtain both the insurance and USDOT number within a matter of months.Read More Posts