New Authority Insurance: What New Trucking Businesses Must Have to Operate

Securing the right insurance for a new authority is a foundational step for any carrier seeking to activate operating authority and begin for-hire interstate transport. The process involves meeting Federal Motor Carrier Safety Administration (FMCSA) requirements and selecting coverage that supports both compliance and financial stability.

This guide outlines the essential policies, especially federally mandated public liability (commercial auto liability), plus optional coverages that strengthen a new carrier’s risk management program.

What “New Authority” Truck Insurance Means

The term “new authority” refers to a carrier that has received a new Motor Carrier (MC) Number to operate interstate under its own name. FMCSA activates this authority only once the carrier’s insurer files official proof of financial responsibility.

In practice, “new authority insurance” usually refers to the core package used to activate an MC Number—primarily public liability (commercial auto liability) and, where applicable, cargo insurance (often required by shippers/brokers even when not required by FMCSA).

Important: Commercial auto liability protects others—it covers bodily injury, property damage, and environmental restoration arising from the vehicle’s operation. It does not cover damage to the owned truck; that is physical damage coverage.

FMCSA Minimum Liability Requirements

FMCSA establishes clear minimum levels of financial responsibility that every for-hire carrier must maintain before operating authority becomes active.

1. Primary (Commercial Auto) Liability

These limits represent minimums under federal law:

• Most for-hire carriers of non-hazardous property (GVWR ≥ 10,001 lbs): minimum $750,000.

• Hazardous materials: typically $1,000,000 or $5,000,000, depending on the commodity/class.

Beyond these federal minimums, new transportation carriers may face additional requirements from states, shippers, or lenders, which can affect both the types of coverage needed and the time required to activate operating authority.

2. Insurance Filings

• BMC-91 or BMC-91X (Public Liability): Filed by the insurer to prove required liability limits.

• BOC-3 (Process Agent Designation): Required for all motor carriers, brokers, and freight forwarders. This is not an insurance filing. It is filed by an FMCSA-registered process agent to designate agents for service of process in each state.

• BMC-34 (Cargo): Only required for household goods (HHG) motor carriers and freight forwarders.

The official federal requirements are detailed in the FMCSA Insurance Filing Requirements Chart.

Cargo Insurance

FMCSA does not require cargo insurance for most general-freight carriers. However, many shippers and brokers expect it by contract—commonly $100,000 per occurrence, with higher limits for high-value freight. HHG carriers/freight forwarders must have and file cargo coverage via BMC-34 (e.g., $5,000 per vehicle / $10,000 per occurrence minimums).

Optional but Recommended Coverages

To mitigate operational risks and strengthen resilience, many carriers enhance their protection through additional insurance components. STAR Mutual RRG provides access to coverages that support a stable insurance portfolio for new authorities:

Physical Damage: offered through the Reliable Transportation Association (RTA), this coverage protects the insured vehicle from repair or replacement costs following collision, theft, vandalism, or certain natural disasters.

Uninsured / Underinsured Motorist (UM/UIM): Offers financial protection in cases involving other drivers who carry insufficient or no insurance. It typically covers medical expenses and certain property-related damages when the at-fault party cannot fully compensate.

Personal Injury Protection (PIP): A no-fault coverage that pays for medical expenses, rehabilitation, and lost wages for drivers and passengers, regardless of who is responsible for the accident.

These commercial auto insurance coverages extend well beyond the minimum FMCSA thresholds and help maintain financial resilience across a variety of operational risks. Additional context is available in the related article Auto Liability Insurance for Trucks: Coverage, Costs, and FMCSA Compliance.

What Affects New Authority Truck Insurance Cost

While coverage structure defines protection, several factors determine the new authority truck insurance cost. Underwriters typically assess:

• Driving history (Motor Vehicle Record): Clean motor vehicle records often correspond with lower premiums.

• Freight type: High-value, fragile, or hazardous materials cost more to insure.

• Routes & radius of operation: Long-haul and congested urban areas present more risk than regional routes.

• Experience: New carriers typically pay higher initial rates until a safety record is established.

Frequent Compliance Challenges

Certain issues can delay authority activation or lead to interruptions in required coverage:

• Incomplete filings: Missing or late submission of BMC-91/91X or, if applicable, BMC-34 forms may result in suspended authority.

• Misaligned coverage: Primary liability addresses third-party harm, while physical damage applies to vehicle repair. Taken together, they provide balanced protection.

• State regulations: Certain states enforce higher liability thresholds for in-state operations.

• Late policy activation: Delayed insurance binding may postpone FMCSA approval and affect start dates for new operations.

• Missing BOC-3: Lack of a process agent filing may keep the authority from going active.

Maintaining accurate filings, timely policy activation, and appropriate coverage structure are essential for continuous compliance.

Conclusion

Obtaining operating authority represents a significant milestone for any new carrier. The insurance requirements are not merely administrative obligations but are designed to ensure that new trucking companies operate with a clear baseline of financial responsibility.

The following action plan provides a structured path to achieving this compliance:

✔ Secure Core Coverage: The carrier should obtain a policy meeting federal minimums—typically $750,000 in commercial auto liability—and carry a recommended minimum of $100,000 in cargo insurance to satisfy shipper and broker contracts.

✔ Enhance Risk Management: The company could strengthen its insurance portfolio with critical optional coverages such as physical damage for owned assets.

✔ Confirm FMCSA Filings: The insurer should file BMC-91/91X (Auto Liability) and the carrier’s process agent should file BOC-3. BMC-34 (Cargo) should be filed only if the carrier is a household goods motor carrier or freight forwarder.

✔ Verify Active Authority: The carrier should confirm that operating authority status is listed as “Active” on the FMCSA website before beginning any for-hire transportation.

✔ Maintain Continuous Compliance: The carrier should adhere to premium payment schedules and implement safety protocols to build a favorable record, helping manage long-term insurance costs.

Member-focused insurers such as Risk Retention Groups (RRGs) understand the operational and regulatory challenges new carriers face, as these organizations are formed and governed by industry participants who manage the same risks in daily operations. More on this model’s advantages is available in Risk Retention Groups: Benefits for Trucking Businesses.