P&C Chapter 10 - Commercial Auto Coverage

Choose the false statement regarding commercial auto coverage. A: The Business Auto Coverage Form will cover liability from mobile equipment while being carried or towed B: The Garage Coverage Form - Section II does not include completed operations C: The form most frequently used for insuring automobiles of a commercial business is the Business Auto Coverage Form D: A Garage Coverage Form - Section II does not provide physical damage coverage to a customer's car

B: The Garage Coverage Form - Section II does not include completed operations It does

Which of the following would not be covered by Comprehensive coverage? A: Loss by a Falling Object B: Vehicle Overturn C: Loss caused by Hitting an Animal D: Glass Breakage

B: Vehicle Overturn Overturn of vehicle is covered under collision coverage

Supplementary Payments include all the following, except: A: Loss of earnings B: Bail bonds C: Attorney's fees D: Court costs

C: Attorney's fees

Which of the following is not a basis for Garagekeepers coverage? A: Legal Liability Basis B: Direct Primary Basis C: Indirect Primary Basis D: Excess Basis

C: Indirect Primary Basis There is no such thing as Indirect Primary basis coverage. Insured can choose form the other 3

All of the following are excluded under the BAP, except: A: Completed Operations B: Racing C: Property damage D: Pollution

C: Property damage BI and PD are covered under Section II, Liability

Which of the following is the least restrictive business auto symbol? A: Symbol 8 B: Symbol 4 C: Symbol 1 D: Symbol 19

C: Symbol 1 Symbol 1, All Autos, is the least restrictive symbol

Specified causes of loss include all of the following perils, except: A: Earthquake B: Vandalism C: Fire D: Collision

D: Collision Collision is a separate coverage, and not one of the specified causes of loss

Which of the following claims is excluded under the Business Auto Policy? A: Bail bonds required after an insured's accident B: Injury to another while driving in another state C: Bodily injury after a person is struck by a mechanical device attached to a covered truck D: Damage to property in the insured's care, custody, or control

D: Damage to property in the insured's care, custody, or control Excluded under the BAP

A BAP covering only Owned Autos Subject to No Fault would include which symbol? A: Symbol 7 B: Symbol 9 C: Symbol 8 D: Symbol 5

D: Symbol 5 Covers autos subject to no fault

Physical Damage coverage under the Business Auto Coverage Form includes all of the following, except: A: Specified Causes of Loss B: Collision Coverage C: Comprehensive Coverage D: Uninsured Motorist Coverage

D: Uninsured Motorist Coverage Uninsured Motorist is a separate coverage added by endorsement. Other answers are physical damage coverages

Supplementary payments cover loss of work up to what amount? A: $250 B: $500 C: $2,000 D: $1,000

A: $250

Which coverage is not available under the Garage Coverage Form? A: Advertising liability B: Garagekeepers C: Product liability D: Physical damage

A: Advertising liability Other available coverages include premises liability and auto liability

Which of the following is not covered under Section II - Liability of the Garage Coverage Form? A: Damage to the customer's car in the insured's care B: Products Liability C: Completed operations liability D: Premise and operations liability

A: Damage to the customer's car in the insured's care Section II (Liability) Coverage does not cover physical damage to vehicles in the insured's care. Section III (Garagekeepers Coverage) does.

Which symbol applies only to autos specified in the Declarations? A: Symbol 7 B: Symbol 2 C: Symbol 4 D: Symbol 9

A: Symbol 7 Symbol 7, Specifically Described Autos, applies only to those autos itemized in the Declarations

Which of the following is true concerning the Limit of Liability under the Business Auto Coverage Form? A: The Limit of Liability is the most the policy will pay regardless of the number of autos, insureds, premiums paid, claims made, or vehicles involved in the accident B: The Limit of Liability is determined by the number of the insured's vehicles involved in an accident C: The Limit of Liability is the amount available for each calim made under the policy D: The Limit of Liability is determined by the number of vehicles scheduled on the policy

A: The Limit of Liability is the most the policy will pay regardless of the number of autos, insureds, premiums paid, claims made, or vehicles involved in the accident The Limit of Liability is the most the policy will pay resulting from any one accident, and it is indicated in the Declarations as the Limit of Insurance for Liability Coverage

The form that insures public truckers against their legal liability for loss or damage to cargo belonging to others in their possession, is called: A: Trucker's Coverage Form B: Shipper's Form C: Transit Form D: Owner's Form

A: Trucker's Coverage Form

Section I of the Truckers Coverage Form provides the option of adding which two symbols to a Commercial Auto policy? A: 27, 28 B: 47, 48 C: 37, 38 D: 17, 18

B: 47, 48 This Section is similar to Section I of the Business Auto Coverage Form, but also provides symbols for trailers in the insured's possession with a written agreement (Symbol 47), and a symbol for the insured's trailers while in the possession of anyone else under a written agreement (Symbol 48).

A Trucker Coverage Form may be used for all of the following, except: A: A trailer that is owned by an insured B: A borrowed tractor used for non-trucking purposes C: A truck that is owned by an insured D: A non-owned unit that is operated over routes for which the licensee is licensed

B: A borrowed tractor used for non-trucking purposes Borrowing a tractor for non-business use is not covered

Hired Autos under the Business Auto Coverage Form do not include: A: Leased private passenger automobiles B: Any autos that the insured leases, hires, rents or borrow from any employees or members of their household C: Truck type autos hired from a contractor or sub-contractor D: Leased or hired truck-tractors and semi-trailers

B: Any autos that the insured leases, hires, rents or borrow from any employees or members of their household Hired Autos coverage covers all leased, hired, rented or borrowed autos except those leased, hired, rented or borrowed from employees, or members of the employee's household

An individual who uses a truck type vehicle to carry his own cargo would receive auto coverage under which of the following coverage forms: A: Garage Coverage Form B: Business Auto Coverage Form C: Truckers Coverage Form D: Owners Coverage Form

B: Business Auto Coverage Form This would be a private carrier and the Business Auto Coverage Form would apply

The Garage Coverage Form may be written for all of the following firms, except a: A: Service station B: Car rental agency C: Car dealership D: Public parking garage

B: Car rental agency A car rental agency is not eligible as this form is primarily for businesses that sell, service, or store automobiles

Which of the following is not a covered peril under the BAP's Specified Causes of Loss property damage coverage? A: Derailment B: Collision C: Earthquake D: Theft

B: Collision Collision is not a specified cause of loss. this kind of PD would be covered by collision coverage

All of the following are true of the Business Auto Coverage Form, except: A: Does not include contractual liability B: Covers injuries to employees C: Covers liability from mobile equipment while being towed D: Provides no-fault in states that require it

B: Covers injuries to employees Injuries to employees would be covered under Workers' Compensation

Damage to a customer's car in the care of the insured would be covered by which section of the Garage Policy? A: Liability B: Garagekeepers C: Physical Damage D: Medical Payments

B: Garagekeepers Damage to a customer's care in the care of the insured is covered by the Garagekeepers Coverage. Damage to an insured auto would be covered by the Physical Damage coverage. BI or PD resulting from business operations would be covered by Liability Coverage. There is no Medical payments coverage in the unendorsed Garage policy

A trucker who transported both passengers and cargo would use which form? A: Garage B: Motor Carrier Coverage C: Truckers Coverage D: Business Auto

B: Motor Carrier Coverage While a trucker is defined as someone engaged in the business of transporting property for hire, a motor carrier is engaged in transporting property or passengers. The motor carrier form is a variation of traditional trucker's coverage developed to reflect the risks associated with transporting passengers in addition to cargo

Which basis of Garagekeepers coverage applies regardless of liability, but only if the customer has no PD coverage of his/her own? A: Legal liability B: Direct Primary C: Excess D: Umbrella

C: Excess Excess Basis coverage applies regardless of lability, but only if the customer has no PD coverage of their own

Which of the following is not a covered peril under the BAP's Specified Causes of Loss property damage coverage? A: Wind B: Flood C: Falling objects D: Hail

C: Falling objects This kind of PD would be covered by comprehensive coverage

The Truckers Coverage Form is designed for: A: Only those firms that own and operate tractor-trailer units B: Any firms that operate trucks as a part of their business operation C: Those firms or persons that are in the business of transporting goods or commodities for another D: It is an excess coverage form for firms that lease commercial vehicles from others

C: Those firms or persons that are in the business of transporting goods or commodities for another The Truckers Coverage Form is written for trucking and freight companies---those companies that are in the business of transporting property for others, rather than its own goods

Policyholder B has a BAP with limits of 100/300/50. In an accident for which B was liable, there were BI claims in the amounts of $80,000; $100,000; and $125,000; and PD claims of $20,000 and $35,000. How much will his policy pay? A: $305,000 BI and $50,000 PD B: $300,000 BI and $50,000 PD C: $305,000 BI and $55,000 PD D: $280,000 BI and $50,000 PD

D: $280,000 BI and $50,000 PD The BI claims of 80k and 100k will be paid in full. The 125k claim exceeds the per person limit and will only be paid up to 100k, resulting in total BI payments of 280k. The PD payments will be capped at the policy limit of 50k per accident

Which of the following would be considered a Non-owned Auto? A: An auto not used in the insured's business B: An auto leased or hired by the insured C: An auto borrowed by the insured D: An auto owned by the insured's employee while being used in the insured's business or personal affairs

D: An auto owned by the insured's employee while being used in the insured's business or personal affairs Symbol 9, Non-owned Autos Only Coverage, provides coverage for only those autos the insured does not own, lease, hire, rent, or borrow, which are used in connection with the insured's business. This includes autos owned by the employees or members of their household

The Business Auto Coverage Form would not cover: A: Private Passenger automobiles owned by the insured and used in the insured's business B: The insured for the use by an employee of the employee's personal auto in the insured's business C: Tractor-trailer units used in the insured's business D: An employee using the employee's personal auto in insured's business

D: An employee using the employee's personal auto in insured's business Although the Non-owned Autos Only coverage covers the insured for the use of employee's cars in the insured's business, it does not cover the employee

All of the following are excluded from coverage under the Business Auto Coverage form, except: A: Intentional Injury B: Property damage arising from pollution C: Property in the insured's care, custody, or control D: Hired Autos

D: Hired Autos Depending on which symbols are listed in the Declarations, hired autos are covered

Which of the following is true of Non-owned vehicles under the BAP? A: Non-owned Autos Coverage covers autos leased for a term of 12 months or more by the insured B: Non-owned Autos Coverage covers rented vehicles C: Non-owned Autos Coverage covers autos hired for specific purposes by the insured D: The main distinction between a hired auto and a non-owned auto is whether or not the auto is owned by an employee

D: The main distinction between a hired auto and a non-owned auto is whether or not the auto is owned by an employee The primary use of Symbol 9, Non-owned Autos Only Coverage is to protect the insured when employees use their autos in the insured's business

Symbol 47 would be found in what type of Commercial Auto Policy? A: Business Auto B: Garage C: Motor Carrier Coverage D: Truckers Coverage

D: Truckers Coverage Symbol 47 covers trailers in the insured's possession