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Looking Both Ways

Building a Foundation for Your New Trucking Business - Part 4

By John Mueller, CDS, COSS
Posted Oct 3rd 2014 11:42AM


This post of Look Both Ways is the fourth in a series on starting your own trucking company.   This blog will address the finer details of the required insurance filings, the required MCS-150 registration and updates, the FMCSA New Entrant Program and some record keeping requirements.    You might find it more enjoyable to watch the paint dry on your new business than read this material, but these topics are very important to understand.   No one ever said that safety and regulatory compliance were fun and easy, nor entertaining.   Let’s try to have some fun and be thoroughly entertained.   You are on the floor laughing…   Welcome to my world.  

  Once you become a carrier your company will be subjected to and expected to comply with all the DOT regulations at all times.   Two very important requirements to possess and retain your own Authority are the insurance filings and the MCS-150.   If you do not comply with the DOT requirements and regulations your company could be issued an order to cease operations.  

Initially insurance companies base motor carrier premiums on a “per power unit basis”.   After building your fleet and establishing a loss history, which may take two or three years of operations, you may be able to choose the manner in which you pay your insurance premiums. Underwriting insurance companies conduct reviews of motor carriers they insure or are working to insure.   This pre-quote review provides information necessary to determine exposure to risk and to assess a premium needed for the insurance company to insure that particular motor carrier risk – a flat dollar amount.   They then work with the motor carrier to determine the formula or means for obtaining that premium – by power unit, by percentage of revenue or by vehicle miles.   Think about analyzing your operations to determine if it will be most beneficial to you to pay for insurance based on: 1) each power unit and type of power unit (cargo van, straight truck and semi-tractor); 2) the insurance premium being based on a percentage of your revenue; or 3) miles.   Paying on each power unit is just that - $XXX.XX for each cargo van in your fleet, $XXX.XX for each Straight truck and $XXX.XX for each semi-tractor.   On the percentage basis, the insurance company benefits along with you on higher paying loads – if you get additional revenue on a load, so does the insurance company.   With the mileage basis understand that you will be paying for all miles travelled.    It is imperative that you establish a good, long term, mutually beneficial relationship with your insurance agency and underwriting insurance company.   You need that insurance company to be there for the catastrophic claim and you need to be willing to pay for quality, knowledgeable service.   Cheap insurance is not always the best way to protect your company and I do not advise shopping insurance each year.   Shop every few years just to keep things honest and reasonable.   You are in a partnership with that insurance company in all claims.


For Freight Brokers authority the FMCSA does not require proof of insurance but instead requires $75,000 “collateral” in the form of a Surety Bond or Trust Fund Agreement (a bank letter of credit or deposit).   The bond or trust fund agreement are filed on forms BMC-84 or BMC-85.   The bond may be purchased for a premium through a number of sources.   You can obtain additional information and a price quote for a bond by visiting


The MCS-150 form is used to obtain a US DOT Number or to provide updates about your company to the DOT.   There is no fee for filing this form or the updates.   When you register online to complete the form, the US DOT will issue your company a PIN number.   Be sure to maintain that PIN in a safe place as you will need it to perform the required updates.   The DOT requires that you provide at minimum a biennial update of your company information.   Should the number of vehicles operated, number of drivers or number of miles change significantly I suggest you provide updates more frequently as the changes occur.   Information provided on your MCS-150 is paired with roadside inspection violations and crash information related to the 7 CSA Basics.   Incorrect, outdated information within the MCS-150 could trigger or adversely affect data for a compliance review.   Information on updates can be found at During your compliance review the DOT will verify your compliance with the major DOT safety regulations.   Some things they will check for include:

·          Alcohol and Drug Violations

·          Driver Violations

·          Operations Violations and

·          Repairs and Inspections Violations



Read: Building a Foundation for Your New Trucking Business - Part 5    

Disclaimer: This blog is NOT intended to give legal advice, nor be a substitute for any training required by the Regulations.

Till the next blog,  Thank you drivers for all you do!. Please be safe!

John Mueller, CDS