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Creating a trucking business and obtaining trucking authority entails careful planning. Of course, there are some federal regulations like getting a US Dot Number and other regulations to comply with, including trucking insurance.
Businesses that involve vehicles for commercial purposes, when the nature of their operation includes ferrying passengers or hauling cargo in interstate business affairs and arrangements, trucking and logistics included, are required to register with the Federal Motor Carrier Safety Association (FMCSA). The application for a US Dot number is of strict adherence because of its relative importance in future dealings such as auditing, crash investigations, accidents, and inspections. The US Dot number is the vehicles unique identifier and in some states, the registration for such number is needed to finish a commercial vehicle registration process. The following states require registration of a US Dot number:
Alabama
Alaska
Arizona
Colorado
Florida
Georgia
Iowa
Kansas
Kentucky
Maine
Michigan
Minnesota
Missouri
New York
Ohio
Oklahoma
Oregon
South Dakota
Tennessee
Utah
Washington
West Virginia
Wisconsin
Wyoming.
All authorized for-hire Motor Carriers of non-exempt property and passengers, Brokers, and Freight Forwarders based in the U.S. or Canada must obtain Operating Authority before they can begin interstate operations in the United States.
Trucking firms may be required to apply for both US Dot Number and interstate trucking operating authority. This depends on the line of the trucking business (forwarder, shipper, and motor carrier among others) and the materials to be transported (non-hazardous materials, hazardous substance, property, and passengers).
On top of this, trucking firms and companies still have to acquire trucking insurance as mandated by federal regulations. Transportation and trucking insurance acts like life safety nets not just for the trucks and rigs, but for the load as well. It is advised that the names of the company and owners submitted in previous trucking papers match the ones provided in their trucking insurance papers to avoid dismissal of insurance applications.
Depending on the line of their trucking business, trucking insurance requirements for passenger, property, and freight trucking and transportations vary. Companies from the said fields are instructed to file a BMC-91 or BMC-91X form, otherwise known as the Public Liability Insurance. If the vehicle to be operated has a gross vehicle weight rating (GVWR) of 10,000 pounds or more to transport non-hazardous commodities or hazardous commodities, bodily injury and property damage (public liability) insurance must be maintained.
The said insurance covers bodily injury, property damage, and environmental restoration. Trucking companies that cater to passengers are covered by as much as $5 million; $1.5 million for those that seat 15 or less passengers. Freight companies are insured from $750,000 to $5 million, depending on the cargo they are transporting.
Aside from the BMC-91 or BMC-91X form and a US Dot Number, motor carriers and freight forwarded should apply for BMC-34, otherwise known as cargo insurance. Cargo insurance covers $5,000 per vehicle for motor carriers and $10,000 per occurrence. Freight brokers, on the other hand, can either file a BMC-84 or BMC-85, known as surety bond and private trust agreement respectively, both of which can cover a trucking company for as much as $10,000.
All Motor Carriers, Brokers, Freight Forwarders must also file a Unified Carrier Registration (UCR). Hazardous Materials Carriers must file and maintain a Hazardous Materials Registration Statement.
Other documents required by the FMCSA for trucking authority and legitimization of transport and trucking operations include an excellent line of arbitration and safety audits from the FMCSAs official auditors for new trucking firms that will be conducted within the firms first 18 months of operations, which includes the following:
Driver Qualifications;
Driver Duty Status;
Vehicle Maintenance;
Accident Register; and
Controlled Substances and Alcohol use and testing requirements.
Non-compliance of the registration requirements and other regulations of the FMCSA may lead to the cancellation of a trucking companys registration for trucking authority and legitimization. In some instances, FMCSA deems a non-adhering trucking company as inactive or out of service.
Trucking companies whose status are marked as inactive or out of service and continue to maintain operations are violating federal regulations. Aside from legal detention, company owners and truck drivers who go beyond the premise of FMCSAs regulations are also subject to suspensions, detention, and monetary penalties. Other repercussions include civil and criminal charges for those who continue their trucking operations despite a suspended or cancelled license or trucking authority.
