Difference Between Common and Contract Authority

Difference Between Common and Contract Authority?

We hear it all the time.  What does getting your operating authority really mean?  Authority is permission for the Federal Motor Carrier Safety Administration (FMCSA) to be able to haul freight passengers or equipment originating from one state to another state.  This means you are complying with the requirements set by the FMCSA

Common Authority
Common carriers provide for-hire truck transportation to the general public.  They must file liability (BI&PD) insurance but are not required to file cargo insurance.

Contract Authority
Contract carriers provide for-hire truck transportation to specific, individual shippers based on contracts.  Contract carriers must file liability (BI&PD) insurance but are not required to file cargo insurance.

Both common and contract motor carriers of household goods are required to file cargo and liability insurance.

Insurance Amount Needed

$750,000 – Operating a vehicle with a gross vehicle weight rating of over 10,000 pounds to transport non-hazardous commodities.

$1,000,000 – Hazardous materials (49 CFR 387.9 – FMCSA’s insurance regulations

$5,000,000 – Transportation of hazardous materials (49 CFR 387.9 – FMCSA’s insurance regulations)

$5,000,000 – Operating a vehicle having gross vehicle weight rating of 10,000 pounds or less transporting any quantity of Division 1.1, 1.2, or 1.3 material, any quantity of Division 2.3, Hazard Zone A, or division 6.1, Packing Group I, Hazard Zone A material; or highway route controlled quantities of a Class 7 material (49 CFR 173.403)

$300,000 – Operating a vehicle having GVWR 10,000 pounds or less with commodities other than those listed above

*Insurance requirements today, in most cases require a minimum of $1,000,000 liability (BI&PD) and $100,000 cargo insurance.