What insurance does a Texas tanker operation need?

This page is for carriers running cargo tanks: fuel and petroleum products, crude oil, chemicals, liquefied gases, asphalt, dry bulk pneumatic tanks, food-grade liquids and water. In Texas, tank work ranges from fuel delivery to stations and farms, to crude and produced water in the oilfield, to chemical hauling out of the Gulf Coast. For oilfield-specific tank work, see oilfield trucking insurance; for placarded loads generally, see hazmat trucking insurance.

Drivers need the right CDL. Federal rules define a tank vehicle as a commercial motor vehicle designed to carry liquid or gaseous materials in a tank with an individual rated capacity over 119 gallons and an aggregate capacity of 1,000 gallons or more (49 CFR 383.5). Operating one requires the tank vehicle endorsement, and hazardous materials require the hazmat endorsement (49 CFR 383.93). Underwriters check that every listed driver holds what the work requires.

The product in the tank sets the federal floor. The table summarizes 49 CFR 387.9 for vehicles at 10,001 lbs GVWR or more. Texas intrastate carriers follow TxDMV's table, which uses the same $5,000,000 and $1,000,000 tiers for hazmat and oil and $500,000 for other carriers over 26,000 lbs.

These are minimums for the auto liability policy. Shippers, terminals and refineries commonly require higher limits plus an umbrella or excess, and some require pollution coverage with its own limit. See federal minimums explained and the trucking umbrella page.

For-hire carriers and hazmat carriers subject to 49 CFR 387 must have the MCS-90 endorsement on their auto liability policy. The endorsement guarantees payment of final judgments for public liability up to the federal minimum, and public liability under the form includes environmental restoration.

IRMI describes the key point plainly: the MCS-90 does not actually provide insurance except on a reimbursement basis. If a claim would be covered by the policy anyway, the endorsement has no practical effect. If the policy would not cover it (for example, a pollution exclusion or an unlisted driver), the insurer pays the injured public and can then seek repayment from the carrier. For a tanker, where a spill can produce cleanup costs, that reimbursement exposure is real money. See what is MCS-90.

• Product classes. Gasoline and diesel, crude, corrosives, compressed gases and food-grade liquids are rated very differently.
• Bulk vs packaged. Bulk tank loads move the account into the higher federal tiers and raise spill severity.
• Loading and unloading. Rack loading at terminals, delivery into underground storage tanks and transloading each carry their own spill and fire exposure.
• Tank equipment. Tank specification, inspection and test records, and the age of tractors and trailers.
• Driver experience in tanks. Liquid surge and rollover risk make tank-specific experience a central underwriting question. See can new CDL drivers get insured.
• Terminal and shipper agreements, which often require the carrier to carry pollution coverage and indemnify the terminal.

Pollution and cleanup

Standard commercial auto forms exclude pollution. IRMI notes that the CA 99 48 broadened pollution endorsement modifies that exclusion but does not remove it entirely. Many tank carriers therefore buy a separate transportation pollution liability policy that addresses cleanup costs, spills during loading and unloading, and pollution away from the vehicle. See truck pollution liability.

Contamination of the cargo

Mixing products, a dirty tank or a wrong compartment can ruin a load without any accident. Many cargo forms limit or exclude contamination, and some tank carriers carry little cargo coverage at all. If the shipper agreement makes you liable for product, check the cargo form.

Delivery and loading damage

Overfilling a customer's tank or damaging their equipment during unloading can fall between auto (loading and unloading) and general liability. Know where your policies draw the line. See truckers general liability.

Indemnity in terminal access agreements

Terminals and plants often require broad indemnity. Texas Transportation Code 623.0155 limits indemnity demands made on a motor carrier as a condition of entering property to load or unload, but not for the carrier's own negligence. Have an attorney review the agreement before signing.

Food-grade tanks

Food-grade liquid tankers may fall under FDA's sanitary transportation rule, which adds cleaning and record terms to many shipper agreements.