Glossary · Insurance & Risk
Primary Liability.
Commercial auto insurance covering bodily injury and property damage to others when at fault; FMCSA mandates $750K–$5M minimum based on cargo.
What it is
Primary liability is the first-line commercial auto coverage protecting third parties when the trucker is at fault in an accident. It pays for bodily injury (BI) and property damage (PD) to others — not to the trucker, not to the trucker's truck, and not to the cargo. It is the single coverage FMCSA explicitly mandates by statute.
FMCSA sets statutory minimums under 49 CFR Part 387: $750,000 for general freight, $1 million for hazmat under 119,000 pounds, and $5 million for hazmat over 119,000 pounds and certain other classes. Carriers must maintain an MCS-90 endorsement evidencing coverage at or above these minimums; the endorsement is filed with FMCSA and stays current with policy renewal. Most brokers and shippers require higher contractual limits — $1M is the practical floor for general freight regardless of statutory class.
Primary liability does not cover the trucker's own truck (that's physical damage), the trucker's own injuries (occupational accident or workers comp), or the cargo (motor truck cargo). Typical $1M premium for an owner-operator runs $8,000–$18,000 per year depending on FICO, MVR, CSA scores, age, and operating-radius location.
Why it matters for trucking finance
Primary liability is the largest single insurance line item for most trucking operators — commonly 4–8% of revenue. Pricing is driven by CSA scores, MVR, claims history, and cargo class; the same truck and driver can see a 2x rate spread depending on how those factors land.
Lenders require evidence of active primary liability before funding equipment loans. Gaps trigger MC# deactivation and immediate factoring suspension. Markets can harden 20–40% in a single renewal. A clean MVR and improving CSA scores are the biggest controllable levers on premium, and the savings compound at every renewal.
Related terms
- Motor Truck Cargo (MTC) — Insurance coverage protecting the freight in transit; required by most brokers and shippers, typically $100K minimum for general freight.
- Physical Damage — Coverage on the carrier's own truck and trailer against collision, theft, fire, vandalism, and other damage; typically required by equipment lenders.
- General Liability (GL) — Commercial general liability covering bodily injury and property damage from non-trucking-related business activities (premises, completed operations).
- DOT Class — Federal vehicle classification (Class 1–8) based on gross vehicle weight rating; affects insurance pricing, licensing, and lender treatment.
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