MCS-90B Endorsement

The MCS-90B is the passenger-carrier counterpart to the property-carrier MCS-90. Required by the FMCSA for for-hire interstate motor carriers of passengers, it attaches to the auto liability policy and acts as a federal financial-responsibility guarantee rather than as ordinary coverage. Its purpose is to make certain that a member of the public injured by a covered bus, van, or shuttle can be compensated up to the mandated minimum, regardless of policy exclusions, gaps, or disputes between the carrier and its insurer. The required amount is tied to seating capacity, commonly $1.5 million for vehicles designed to carry 15 or fewer passengers and $5 million for those built to carry 16 or more.

For a small passenger-transport operator, the MCS-90B is a condition of holding interstate authority, not an optional coverage upgrade. It is best understood as a public safety net layered on top of the actual policy: if the insurer would otherwise deny a claim, for example because a vehicle was not properly scheduled, the endorsement obligates the insurer to pay the injured public anyway. That protects accident victims, but it does not protect the carrier, because it is a promise to third parties rather than first-party coverage for the business.

The critical nuance is the reimbursement mechanism. When the insurer pays a claim under the MCS-90B that the underlying policy did not actually cover, the carrier is legally obligated to pay that money back to the insurer. In effect the endorsement operates like a surety guarantee bolted onto the policy, closely related to the property-side financial responsibility filing requirements. Maintaining genuine, properly scheduled coverage is the only way to avoid turning a covered-looking loss into a large personal debt owed back to the carrier.