Running under someones authority ????

He can get his own through someplace like OOIDA if he's going to lease onto you.

You have to cover his cargo though.

 

If he has his own insurance why doesn't he just get his own authority? If he is truly providing all the proper coverage he should be able to easily get his own MC number. It is more likely that he just has non-trucking and physical damage and isn't understanding the whole insurance and authority issue.

You as the motor carrier must cover the primary liability (MCS-90) and cargo, he can only provide for his own non-trucking and physical damage liability. The primary (aka public) liability is tied directly to your MC number and by federal law it must cover anyone running under your authority. That doesn't mean you can't charge it back to him, it is just that you must provide it, Progressive is correct. It sounds like the company with the bad history is doing some shady stuff and not being honest with their insurer which is not surprising.

Keep in mind, you let anyone run under your authority you become fully responsible for them, their truck and any drivers they put in it. The DOT violations they get go against your DOT number and should they be in an accident you are financially responsible for it. You also have to complete a driver qualification file, put them on your drug testing program and you become responsible under the leasing regulations to pay them even if the broker stiffs you for the loads they do.

Basically the DOT does not see any difference between trucks you own with employee drivers and leased on owner operators using your authority. You as the motor carrier become legally liable for everything they do, so make sure you are getting enough of a piece of the work to make it worth the risk.