Ch.10 - Commercial Auto Coverage

Symbol 30

"Autos" left with the insured for service, repair, storage, or safekeeping

Contract Carrier

A business individual or organization that carries persons or property for a fee, from one place to another. The persons or property being transported are only those of certain customers and NOT the general public. Unlike a common carrier, a contract carrier may refuse to carry persons or property

Common Carrier

A business individual or organization that carries persons or property for a fee, from one place to another. The persons or property being transported are, or belong to, the general public

Suit

A civil proceeding in which damages are alleged because of "bodily injury," "property damage," or "covered pollution cost or expense" and to which the policy applies. A "suit" includes an arbitration proceeding and any other alternative dispute resolution proceeding.

Auto

A land motor vehicle, trailer, or semitrailer, designed for travel on public roads or any other vehicle subject to a compulsory or financial responsibility law or motor vehicle insurance law in the jurisdiction where the vehicle is licensed or principally garaged. Mobile equipment is not an "auto."

Trailer

A semi-trailer.

Symbol 1

Any Auto, if it is used in the insured business, regardless of ownership.

Mobile Equipment

Any of the following types of land vehicles, including any attached machinery or equipment: - Bulldozers, farm machinery, forklifts and other vehicles not used on public roads. - Vehicles used solely on a premises owned/rented by the named insured. - Vehicles that travel on crawler treads. - Vehicles that are used to provide mobility to permanently mounted power cranes, shovels, loaders, diggers, drills, and construction equipment

Insured

Any person or organization qualifying as an insured in the Who is an Insured provision of the applicable coverage. Except with respect to the Limit of Insurance, the coverage afforded applies separately to each insured who seeks coverage or against whom a claim or "suit" is brought.

Pollutants

Any solid, liquid, gaseous, or thermal irritant or contaminant, including smoke, vapor, soot, fumes, acids, alkalis, chemicals, and waste. Waste includes materials to be recycled, reconditioned, or reclaimed

Comprehensive Coverage

Coverage is provided for physical damage to a covered auto or its equipment on an open perils basis. The single peril excluded is collision, which is a vehicle's impact with another object or its overturn.

Collision Coverage

Coverage is provided for the covered auto's impact with another object or its overturn.

Symbol 31

Dealers "autos" physical damage coverages.

The Motor Carrier Act of 1980

Deregulated the trucking industry by no longer allowing rate bureaus to interfere with a motor carrier's right to charge its own rates. it also requires certain vehicles to carry specific minimum limits of liability insurance for the protection of the public and the environment.

Loss

Direct and accidental loss or damage

Symbol 8

Hired Autos Only, which are those the insured leases, hires, rents or borrows, except any auto the insured leases, hires, rents, or borrows from an employee. These vehicles may not be owned by the insured.

Accident

Includes continuous or repeated exposure to the same conditions that results in "bodily injury" or "property damage."

Symbol 19

Mobile Equipment Subject to Compulsory or Financial Responsibility or Other Vehicle Insurance Law, which triggers protection for autos that are otherwise described as "mobile equipment" but are required to be licensed and registered to be operated on public roadways. This symbol is necessary since mobile equipment is excluded from the definition of "auto" under the business auto policy.

Symbol 9

Non-owned Autos Only, which are those the insured does not own, lease, hire, rent or borrow, and are used in connection with the insured's business. This includes autos owned by an employee of the insured or a member of the employee's household.

Symbol 29

Non-owned autos used in garage business

Symbol 2

Owned Autos Only, whether or not specifically listed on the policy

Symbol 4

Owned Autos Other Than Private Passenger Autos Only

Symbol 5

Owned Autos Subject to No Fault Laws

Symbol 6

Owned Autos Subject to a Compulsory Uninsured Motorist Law

Symbol 3

Owned Private Passenger Autos Only; a business may wish to provide insurance differently for its cars than for its dump trucks or vehicles used for delivery

Symbol 7

Specifically described vehicles listed on the declarations page

After an employee of a service station failed to tighten the oil filter, the leaking oil caused $700 in damage to the engine. Section II of a Garage Coverage Form would pay: a. $700 less the $100 mandatory deductible b. $700 only if the employee is proven negligent c. Nothing d. $700 less the $250 mandatory deductible

a. $700 less the $100 mandatory deductible [A $100 deductible applies to all losses resulting from property damage to an auto as a result of work performed on that auto by the insured.]

Which coverage is not available under the Garage Coverage Form? a. Advertising liability b. Garagekeepers coverage c. Physical damage coverage d. Product liability

a. Advertising liability [Other provided coverages include premises liability and auto liability.]

Which of the following is NOT one of the five symbol designations on the Business Auto Physical Damage Coverage form? a. Autos left for service b. Owned autos only c. Hired autos only d. Specifically described autos

a. Autos left for service [The other two symbols are owned private passenger autos only and owned autos other than private passenger autos only.]

Section II of the Garage Coverage Form does not cover: a. Damage to the customer's car in the insured's care b. Products liability c. Premise and operations liability d. Completed operations liability

a. Damage to the customer's car in the insured's care [Section II (Liability) Coverage does not cover vehicles in the insured's care, custody or control. Section III (Garagekeepers Coverage) provides this coverage.]

Which of the following is NOT an "insured" under the Business Auto Coverage form? a. Fellow employee b. Named insured c. Person using a borrowed auto with permission of the insured d. Person liable for the conduct of the insured

a. Fellow employee [Under Section II - Liability coverage bodily injury liability coverage does not apply to a fellow employee]

What is the name for insurance covering the amount an insured is legally obligated to pay for loss to a customer's vehicle in the insured's care? a. Garagekeepers coverage b. Garage coverage form c. Business auto coverage d. Garage product liability

a. Garagekeepers coverage [Garagekeepers coverage pays for loss or damage to a customer's vehicle and equipment while in the insured's care for servicing, repair, parking, or storing.]

How is lost or damaged property valued under the BAP? a. Lesser of ACV. or the cost to repair or replace b. Lesser of the replacement cost and the ACV c. Greater of the cost to repair and the replacement cost d. Greater of the ACV or the cost to repair or replace with like kind

a. Lesser of ACV. or the cost to repair or replace

All of the following are true of the Business Auto Coverage Form, except: a. Uninsured Motorist Coverage is included in Section II b. Medical payments coverage may be added by endorsement c. Coverage is primary on owned autos and excess on non-owned autos d. Coverage may be written on owned private passenger autos

a. Uninsured Motorist Coverage is included in Section II [Section II of the BAP provides liability coverage. Uninsured Motorist coverage is provide by optional endorsement.]

Which would be covered under the Business Auto Coverage Form? a. A trailer stored for another person b. A borrowed truck used in the insured's business c. A vehicle repaired for others d. Dealer inventory

b. A borrowed truck used in the insured's business [The BAP covers owned, leased, hired, rented, or borrowed cars, trucks, trailers, and semitrailers owned and used by a business.]

Which of the following is true about the Individual Named Insured endorsement? a. Protects the named insured who does not own a car b. Applies to all resident family members c. Adds business coverage to a personal private passenger auto d. Coverage is provided only to those individuals listed on a Schedule

b. Applies to all resident family members [The Individual Named Insured endorsement adds all resident family members to the Business Auto Coverage form in order to allow family member permission to drive business autos.]

BAP liability coverage would not apply to which of the following? a. Bail bonds required after an insured's accident b. Damage to property in the insured's care c. Injury to another while driving in another state d. Bodily injury after a person is struck by a mechanical device attached to a covered truck

b. Damage to property in the insured's care [Damage to property in the insured's care, custody, or control is excluded under the BAP]

Which type of Commercial Auto policy would be best suited for a parking garage business? a. Motor Carrier Coverage Form b. Garage Coverage Form c. Truckers Coverage Form d. Business Auto Coverage Form

b. Garage Coverage Form

Which of the following covers the insured's legal obligations for damage to a customer's car? a. Auto Liability b. Garagekeepers c. Physical damage d. General Liability

b. Garagekeepers [Garagekeepers coverage is the Garage Coverage form to eliminate possible coverage gaps.]

All of the following are true of the Business Auto Coverage Form, except: a. It provides no-fault coverage in states that require it b. It covers injuries to employees c. It does not include contractual liability coverage d. It covers liability from mobile equipment while being towed

b. It covers injuries to employees [Injuries to employees would be covered under Workers' Compensation.]

The deregulation of the trucking industry was accomplished through which 1980 regulation? a. Trailer Interchange Act b. Motor Carrier Act c. Motor Carrier Public Liability Act d. Trucking Reform Act

b. Motor Carrier Act [This regulation requires certain vehicles carry minimum liability limits ranging from $750,000 to $5,000,000, depending on the type of merchandise transported. ]

The Garagekeepers Coverage of the Garage Coverage Form covers the liability of: a. Owned vehicles that are used in the business b. Physical damage to a customer's car that is in the care and custody of an insured c. Product liability exposures d. Damage to autos held for sale

b. Physical damage to a customer's car that is in the care

A firm that transports goods of others, rather than its own goods, would purchase a: a. Truckers Liability Coverage b. Truckers Coverage Form c. Non-Owned Good Policy d. Specified Peril Policy

b. Truckers Coverage Form [A Truckers Coverage Form is designed for common and contract carriers hauling the goods of others.]

Which of the following is covered under Section III - Garagekeepers on the Garage Coverage form? a. Completed Operations b. Vehicles and equipment owned by others in the care of the insured c. Uninsured Motorists d. Garage Operations

b. Vehicles and equipment owned by others in the care of the insured [Garagekeepers Coverage provides Comprehensive, Specified Causes of Loss, and Collision coverage for the vehicle and its equipment while in the care, custody, and control of the insured.]

What is the maximum the insurer will pay for a covered transportation expenses claim? a. $200 b. $400 c. $600 d. $800

c. $600 [Transportation expenses are paid up to $20 per day and a maximum of $600 for temporary transportation expenses for the total theft of a covered vehicle.]

All of the following statements regarding a common carrier covered under the Truckers and Motor Carrier Coverage form are correct, except: a. A business individual that carries the general public from one place to another for a fee b. A common carrier can also use the Motor Carrier Coverage Form c. A common carrier must use the Trucker Coverage Form d. A trucker that transports goods belonging to several customers at the same time

c. A common carrier must use the Trucker Coverage Form [A common carrier can use either the Trucker Coverage Form or the Motor Carrier Coverage Form.]

Which of the following autos is covered under Symbol 9 of the Business Auto Coverage Form? a. An auto leased or hired by the insured b. An auto borrowed by the insured c. An auto owned by the insured's employee while used in the insured's business d. Any auto not used in the insured's business

c. An auto owned by the insured's employee while used in the insured's business [Non-owned Autos Only Coverage, Symbol 9, 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.]

Which of the following would not be eligible for coverage under the Business Auto Coverage Form? a. A tractor-trailer used in the insured's business b. A private passenger automobile owned by the insured and used in the insured's business c. An employee injured using the employee's personal auto in insured's business d. The insured for an employee's use of a personal auto in the insured's business

c. An employee injured 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 injuries to the employee (these would be covered under a Workers' Compensation policy).]

The Business Auto Coverage Form covers all of the following, except: a. Owned private passenger autos b. Mobile equipment registered to drive on public roads c. Automatic coverage for physical damage to trailers d. Automobiles owned by employees used for business purposes

c. Automatic coverage for physical damage to trailers [Owned trailers used by businesses may be covered for physical damage coverage but it is not automatic coverage.]

A business individual that carries people and property belonging to the general public for a fee from one place to another is called which of the following? a. Livery carrier b. Contract carrier c. Common carrier d. Motor carrier

c. Common carrier

Section III of the Garage Coverage Form provides which coverage? a. Products liability b. Liability for garage operations c. Garagekeepers coverage d. Liability for owned vehicles that are used in the business

c. Garagekeepers coverage [Section III provides insurance for amounts the insured is legally obligated to pay for loss or damage to a customer's vehicle and/or equipment while it's in the insured's care for servicing, repair, parking, or storing--otherwise known as garagekeepers coverage. ]

All of the following regarding the Garage Coverage Form are correct, except: a. Coverage is typically written using a blanket limit of insurance b. It provides physical damage coverage for covered autos the named insured owns, hires, rents, leases, or borrows c. It provides coverage for product recall d. It provides automobile liability, physical damage, and general liability insurance for auto businesses

c. It provides coverage for product recall [The Garage policy does not cover property in the care and custody of the insured, injuries covered by Workers' Compensation, and liability arising from pollution or product recall.]

Which of the business auto coverage forms provides insurance for a contract carrier that transports its own goods in addition to the goods owned by others? a. Business Auto Coverage Form b. Truckers Coverage Form c. Motor Carrier Coverage Form d. Garage Coverage Form

c. Motor Carrier Coverage Form [The Motor Carrier Coverage Form provides coverage for contract carriers for the transportation of goods, for hire, that are owned by others and transporting their own property.]

Which Business Auto Symbol is the most broad of all Symbols? a. Symbol 2 b. Symbol 3 c. Symbol 1 d. Symbol 4

c. Symbol 1

What coverage under the Motor Carrier Coverage form provides physical damage coverage for non-owned trailers and equipment in the event of an at-fault accident? a. Other Insurance Clause b. Truckers Physical Damage Coverage c. Trailer Interchange Coverage d. Commercial Truckers Coverage

c. Trailer Interchange Coverage [This coverage is included because truckers and motor carriers may hire independent operators to drive the owned vehicle.]

Physical damage coverage under a Business Auto Coverage Form includes all of the following, except: a. Collision Coverage b. Comprehensive Coverage c. Uninsured Motorist Coverage d. Specified Causes of Loss

c. Uninsured Motorist Coverage [The three types of physical damage coverage under the BAP are collision, comprehensive, and specified perils. Uninsured Motorist is a separate coverage added by endorsement.]

Which vehicle would not be eligible for a Business Auto Coverage Form? a. A trailer that is used to carry a backhoe b. A van that is used by a delivery firm c. A private passenger auto that is used in the business d. A forklift used in the business

d. A forklift used in the business [Being mobile equipment, a forklift is not eligible for auto coverage, other than by endorsement.]

General Conditions in the business auto policy apply to which of the following? a. Appraisal b. Legal action against the insured c. Transfer of rights d. Bankruptcy

d. Bankruptcy [The other choices are Loss Conditions, and also included as General Conditions are concealment, misrepresentation, or fraud, liberalization, other insurance, premium audit, policy period, and territory]

The Garage Coverage Form may be written for all of the following, except: a. Public parking garage b. Car dealership c. Service station d. Car rental agency

d. Car rental agency [A car rental agency would not be eligible under this form, which is intended for businesses that sell, service, or store automobiles.]

All of the following are sections of the Garage Coverage Form, except: a. Garagekeepers Insurance b. Physical Damage Insurance c. Liability Insurance d. Comprehensive Insurance

d. Comprehensive Insurance [Comprehensive coverage is part of the Physical Damage coverage provided by Section IV.]

Which of the following is not a Symbol under Section I - Covered Autos? a. Any auto b. Specifically described on Declarations c. Owned Autos Subject to No Fault d. Dealers auto liability coverage

d. Dealers auto liability coverage [Symbol categories also describe only non-owned autos, hired autos, and owned private passenger autos only.]

The passage of the Motor Carrier Act of 1980 resulted in all of the following, except: a. Deregulation of the trucking industry b. Prohibition of rating bureaus to develop the rates c. Mandatory minimum liability limits d. Increase in truckers wages

d. Increase in truckers wages [As a result of this Act, the number of motor carriers doing business increased and the consumer costs associated with trucking decreased, thus reducing trucker wages.]

For which of the following persons is the Drive Other Car endorsement intended? a. The officers and directors of a corporation b. Owners of school buses c. Truckers and motor carriers d. Individuals who do not own an auto

d. Individuals who do not own an auto [The Drive Other Car endorsement may be added to any of the business auto coverage forms and is designed for individuals who do not personally own and insure an auto.]

Mobile equipment does not include which of the following? a. Vehicles that travel on crawler treads b. Resurfacing equipment mounted on a vehicle c. Farm machinery designed for off-road use d. Motor vehicles designed for road use

d. Motor vehicles designed for road use [Mobile equipment does not include vehicles designed for road use.]

Section II (Liability) of the Garage Coverage Form covers which of the following? a. Injuries to an employee that are caused by a fellow employee b. Property in the care and custody of the insured c. Injuries covered by Workers' Compensation d. Property damage for which the insured is legally responsible

d. Property damage for which the insured is legally responsible

Which of the following is not a specified loss under the garagekeepers section of the Garage Coverage Forms? a. Theft b. Vandalism c. Fire d. Windstorm

d. Windstorm [While windstorm is a covered peril under the specified causes of loss of the BAP, under Section III (garagekeepers coverage) causes of loss include only fire, lightning, explosion, theft, mischief, and vandalism.]