Form CA 00 20: Motor Carrier Coverage Form
1. What the form is
The CA 00 20, an ISO (Insurance Services Office) form titled "Motor Carrier Coverage Form," is a standard insurance policy used in commercial auto lines. It is specifically designed to provide auto liability coverage and optional physical damage coverage for businesses that transport goods for others in exchange for a fee. These businesses are commonly known as "for-hire" motor carriers, which can be either common carriers (serving the general public) or contract carriers (hauling goods for specific customers under contract). The form addresses the unique liability exposures these trucking operations face, which differ significantly from businesses that only haul their own goods (private carriers). It aims to clarify who is considered an insured and how coverage applies in various scenarios common in the trucking industry, such as when using hired autos or interchanging trailers. It is considered more flexible than the older Truckers Coverage Form (CA 00 12) and better reflects the current, often contract-based, regulatory environment of the trucking industry.
2. Classes of business it applies to
The CA 00 20 is primarily intended for any person or organization that operates as a "motor carrier," meaning they are in the business of transporting property by auto for furtherance of a commercial enterprise. This includes:
- Common Carriers: Trucking companies that offer their services to the general public to transport goods for a fee over regular or irregular routes. For example, a less-than-truckload (LTL) carrier that consolidates freight from multiple shippers or a household goods mover.
- Contract Carriers: Trucking businesses that haul goods for specific companies under a contractual agreement. For instance, a trucking company that has a dedicated contract to transport automotive parts for a car manufacturer or a company that exclusively hauls groceries for a particular supermarket chain.
While the form is designed for for-hire carriers, it can technically be used for any entity transporting goods for commercial purposes, though the Business Auto Coverage Form (CA 00 01) is often more suitable for private carriers (those hauling their own goods). The CA 00 20 is designed to handle the complexities of motor carrier operations, including compliance with regulations like the Motor Carrier Act of 1980.
3. Special considerations
Several important factors distinguish the CA 00 20 and dictate its appropriate use:
- "Who Is An Insured": This section is a key differentiator from the Business Auto Policy (BAP). It is specifically tailored to address situations common in trucking, such as providing coverage for the owner of a hired or borrowed auto when it's being used in the named insured's motor carrier business. It also clarifies coverage when trailers are interchanged.
- Trailer Interchange Coverage: Section III of the CA 00 20 specifically provides physical damage coverage for non-owned trailers (and their equipment) in the insured's possession under a written trailer interchange agreement where the insured assumes liability for loss to the trailer. This is crucial for truckers who often haul trailers owned by others.
- Regulatory Compliance: Motor carriers are subject to various federal and state regulations, including financial responsibility requirements (e.g., MCS-90 endorsement). The CA 00 20 is designed to be more aligned with these regulatory needs than a standard BAP.
- Contractual Agreements: Unlike the older Truckers Coverage Form (CA 00 12) which focused more on regulatory authority, the CA 00 20 emphasizes the contractual relationships between the motor carrier and its clients or other parties (like owner-operators). These agreements often dictate liability and insurance responsibilities.
- Limitations: The form has specific exclusions. For example, it typically excludes rail, water, or air carriers when a covered auto is being transported by them and is not attached to a power unit. It's also important to note that the form does not automatically cover all electronic equipment; however, coverage has been broadened for permanently installed electronic equipment that reproduces, receives, or transmits audio, visual, or data signals and is powered by the vehicle's electrical system.
- Alternative to Truckers Coverage Form (CA 00 12): The CA 00 20 is largely replacing the CA 00 12 as it is better suited to the deregulated trucking environment. While the CA 00 12 is still used, particularly by common carriers operating under specific governmental authority, the CA 00 20 offers more flexibility.
Real-world example for Trailer Interchange: A for-hire trucker drops off a loaded trailer at a consignee and picks up an empty trailer from a different company to haul to another location. If that empty trailer is damaged while in the trucker's care and under a written interchange agreement, Trailer Interchange Coverage under the CA 00 20 would respond to the physical damage to that non-owned trailer.
Real-world example for "Who Is An Insured": A motor carrier hires an independent owner-operator (who owns their tractor) to pull one of the motor carrier's trailers. The CA 00 20, when appropriately structured, can provide primary liability coverage for the owner-operator while they are operating exclusively for the named insured motor carrier, addressing the vicarious liability of the motor carrier.
4. Key information for agents and underwriters
Agents and underwriters should pay close attention to the following when dealing with the CA 00 20:
- Proper Symbol Usage: Item Two of the Declarations uses numerical symbols to designate which autos are "covered autos" for each coverage. Using the correct symbols (e.g., Symbol 61 for "Any Auto," Symbol 68 for "Hired Autos Only," Symbol 69 for "Trailers In Your Possession Under A Written Trailer Or Equipment Interchange Agreement") is critical to ensure intended coverage applies. Incorrect symbol usage can lead to significant coverage gaps.
- Risk Assessment: Underwriting trucking risks requires a thorough evaluation of factors beyond standard auto risks. This includes the nature of cargo hauled (hazmat, perishables, high value), radius of operations (local, intermediate, long-haul), driver experience and MVRs, DOT safety ratings (CSA scores), vehicle maintenance programs, and loss history. Information from the Federal Motor Carrier Safety Administration (FMCSA) is publicly accessible and crucial for underwriting.
- Radius of Operations and Zone Rating: Trucks regularly operating over a 200-mile radius are considered "long-haul" and may be subject to zone rating, which bases premiums on the geographic zones where they travel.
- Contractual Review: Scrutinize all contracts the motor carrier has, including those with shippers, brokers, and owner-operators. These contracts often contain insurance requirements, hold-harmless agreements, and indemnity clauses that can significantly impact the insured's liability and coverage needs.
- Filings: Determine if federal (e.g., MCS-90 for interstate carriers) or state financial responsibility filings are required. The MCS-90 endorsement, while providing assurance of financial responsibility to the public, also grants reimbursement rights to the insurer from the insured for payments made under the endorsement that would not have been covered by the policy itself. This needs to be clearly explained to the insured.
- "Other Insurance" Clause: The CA 00 20's "Other Insurance" condition often makes the motor carrier's policy primary for hired vehicles when used in their business, and excess when their vehicle is leased to another motor carrier. This differs from the standard BAP where the vehicle owner's policy is typically primary.
- Coverage Gaps: Be aware of potential gaps, such as non-trucking use (bobtail) liability for owner-operators when not under dispatch for the motor carrier. Specific endorsements may be needed to address these exposures. The Business Auto Coverage Form (CA 00 01) might be used for bobtail operations only. Also, consider cargo liability, which is not covered under the CA 00 20 and requires a separate motor truck cargo policy.
- Endorsements: A wide array of endorsements is available to tailor the CA 00 20 to specific needs, such as broadening or restricting coverage. Understanding and correctly applying these endorsements is vital.
The CA 00 20 is a complex form, and a detailed understanding of its provisions, along with the specific operations and contractual obligations of the motor carrier, is essential for providing appropriate coverage and avoiding errors and omissions.