Ch.10 Commercial Auto Coverage

Which Commercial auto symbol is unique to the Garage Coverage Form? A 30 B 40 C 20 D 10

A 30 There are two unique symbols under the Garage Coverage Form: Symbol 30 designates autos left with the insured for service, repair, storage, or safekeeping. Symbol 31 designates physical demise coverage for dealers' autos.

How many vehicles would a business be required to have to qualify for Commercial Auto Fleet Rates? A 5 or more B 10 or more C 3 or more D 7 or more

A 5 or more

Choose the false statement regarding commercial auto coverage. A Section II of the Garage Coverage Form - does not provide completed operations coverage B The Business Auto Coverage Form will cover liability arising from mobile equipment being carried or towed C Section IV of the Garage Coverage Form provides coverage for the insured's owned autos D Section II of the Garage Coverage Form does not provide physical damage coverage to a customer's car

A Section II of the Garage Coverage Form - does not provide completed operations coverage Section II of the Garage Coverage Form provides bodily injury and property damage liability coverage for losses resulting from garage operations. In addition, the form includes coverage for Premises and Operations Liability, Products Liability, and Completed Operations Liability.

Which Business Auto Symbol provides the broadest coverage? A 1 B 9 C 2 D 3

A.1

Under the Motor Carrier Act of 1980, what is the minimum limit of liability required when transporting oil or other hazardous materials? A $2,500,000 B $1,000,000 C $5,000,000 D $750,000

B $1,000,000 The Motor Carrier Act of 1980 states that the minimum liability limits required are: $750,000 for non-hazardous materials, $1,000,000 for oil or other hazardous materials, and $5,000,000 for large quantities of certain types of explosive or very dangerous hazardous materials.

What is the maximum the Supplementary Payments coverage of a BAP will pay for the cost of bail bonds? A $2,500 B $2,000 C $250 D $200

B $2,000

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 only if the employee is proven negligent B Nothing C $700 less the $100 mandatory deductible D $700 less the $250 mandatory deductible

C $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.

All of the following are general conditions of the BAP, except: A Premium audit B Concealment, misrepresentation, or fraud C Duties in the event of an accident D No benefit to bailee for physical damage

C Duties in the event of an accident Duties in the event of an accident is a loss condition under the BAP, not a general condition.

When an employee is injured in an auto accident while on company business, he/she would be covered under: A Garagekeepers Form B Company group health insurance C Workers' Compensation Insurance D Garage Liability Form

C Workers' Compensation Insurance

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

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

The deregulation of the trucking industry was accomplished through which 1980 regulation? A Trailer Interchange Act B Trucking Reform Act C Motor Carrier Public Liability Act D Motor Carrier Act

D 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 Product liability exposures B Owned vehicles that are used in the business C Damage to autos held for sale D Physical damage to a customer's car that is in the care and custody of an insured

D Physical damage to a customer's car that is in the care and custody of an insured Garagekeepers coverage provides insurance for amounts the insured is legally obligated to pay for loss or damage to a customer's vehicle in the insured's care for servicing, repair, parking, or storing.

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

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

All of the following are automatically included in an unendorsed Commercial Business Auto coverage form, EXCEPT: A Borrowed private passenger autos B Public buses, taxis, and limousines C Certain trailers and mobile equipment of limited size and weight D Owned or leased trucks and trailers

B Public buses, taxis, and limousines Business Auto Coverage is used to cover: owned, leased, hired, rented or borrowed autos, trucks, trailers and semi trailers. It would not cover vehicles for hire.

Which section of the BAP provides auto medical payments coverage? A Section I B This coverage is available by endorsement only C Section III D Section II

B This coverage is available by endorsement only Commercial auto policies do not automatically provide medical payments coverage, which must be added by endorsement.

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 Motor carrier B Livery carrier C Common carrier D Contract carrier

C Common carrier A common carrier is 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. A trucker is a common carrier and may transport goods belonging to several customers at the same time.

All of the following are sections of the Garage Coverage Form, except: A Physical Damage Insurance B Liability Insurance C Garagekeepers Insurance D Comprehensive Insurance

D Comprehensive Insurance Comprehensive coverage is part of the Physical Damage coverage provided by Section IV.

ACV is generally used for which of the following types of claims? A Auto Physical Damage B Umbrella C Businessowners Property D Workers' Compensation

A Auto Physical Damage Of the choices, Auto Physical Damage Coverage will pay the lesser of the actual cash value or the cost of repairing the damage with property of like kind and quality.

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

A Firms in the business of transporting goods or commodities The Truckers Coverage Form is written for trucking and freight companies---those companies that are in the business of transporting property for others.

Which section of the BAP provides auto medical payments coverage? A This coverage is available by endorsement only B Section II C Section I D Section III

A This coverage is available by endorsement only Commercial auto policies do not automatically provide medical payments coverage, which must be added by endorsement.

Under the Business Auto coverage form, the non-owned auto category represents: A Any auto used in the insured's business B Autos owned by employees, but driven in the insured's business C Autos leased by the insured to be used in the insured's business D Autos rented by the insured to be used in the insured's business

B Autos owned by employees, but driven in the insured's business Non-owned autos are autos that employees own and operate in the course of the insured's business. This is referred to as Symbol 9 coverage. Ex. Pizza delivery person using their car to deliver pizzas.

Which type of Commercial Auto policy would be best suited for a company whose employees used their own vehicles to make sales calls? A Garage Coverage Form B Business Auto Coverage Form C Truckers Coverage Form D Motor Carrier Coverage Form

B Business Auto Coverage Form The BAP covers owned, leased, hired, rented, or borrowed private passenger autos, trucks, trailers, and semi-trailers that are owned or used by the insured. This includes autos owned by employees while being used in the business.

Which of the following provide coverage for vehicles leased or rented by a company for employees to use for personal use? A Symbol 9 Coverage Endorsement B Drive Other Car Coverage Endorsement C Individual Named Insured Endorsement D Employees as Additional Insureds Endorsement

B Drive Other Car Coverage Endorsement Drive Other Car Coverage is similar to Symbol 8 for Hired or leased autos. It is most commonly used when a company executive is furnished a company car and does not carry a Personal Auto policy because he/she does not own a personal vehicle.

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

C Damage to the customer's car in the insured's care Section II provides bodily injury and property damage liability coverage for losses resulting from garage operations. In addition, the form includes coverage for Premises and Operations Liability, Products Liability, and Completed Operations Liability. The section 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.

All of the following are loss conditions of the BAP, except: A Transfer of rights of recovery B Duties in the event of an accident C Examination of Your Books and Records D Legal action against the insurer

C Examination of Your Books and Records The Examination of Your Books and Records condition is a Common Policy Condition of the CPP.

Comprehensive Coverage under Physical Damage Coverage of the Business Auto Coverage Form, includes all of the following, except: A Glass Breakage B Lightning C Theft D Collision

D Collision Comprehensive Coverage under the Business Auto Coverage Form is a broad open perils coverage that covers damage from perils not excluded. Collision is excluded under the policy.

Which of the following provides auto liability and physical damage coverage, as well as general liability for businesses engaged in the sale, service and storage of automobiles? A Motor carrier coverage B Garagekeepers coverage C Business auto coverage D Garage coverage

D Garage coverage Garage Coverage provides physical damage and auto liability, as well as general liability for the businesses engaged in sales, service, and storage of automobiles.

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 Motor Carrier Coverage Form B Business Auto Coverage Form C Garage Coverage Form D Truckers Coverage Form

A Motor Carrier Coverage Form

All of the following regarding Commercial Auto coverage are true, except: A The most frequently used commercial auto policy is the Business Auto Coverage Form B Section II of the Garage Coverage Form does not include completed operations coverage C The Business Auto Coverage Form will cover liability from transporting mobile equipment D Section II of the Garage Coverage Form does not provide physical damage coverage to a customer's car

B Section II of the Garage Coverage Form does not include completed operations coverage

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.

How is lost or damaged property valued under the BAP? A Greater of the ACV or the cost to repair or replace with like kind B Lesser of the replacement cost and the ACV C Greater of the cost to repair and the replacement cost D Lesser of the ACV or the cost to repair or replace

D Lesser of the ACV or the cost to repair or replace The most the insurer will pay for damaged or stolen property in any one accident is the lesser of the ACV or the cost of repairing or replacing with property of like kind and quality

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

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

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

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

When an employee drives his own vehicle in an employers business, he is covered under which of the following Commercial Auto coverages? A Employee as additional insured B Drive other car coverage C Uninsured motorists coverage D Individual named insured

A Employee as additional insured The Endorsement 'Employees as additional insured's' is used in the same manner as Symbol 9 coverage which provides the business auto coverage for 'Non-Owned Auto's'.

The endorsement providing evidence of financial responsibility for motor carriers is know as: A Form MCS-90 B Form MCS-900 C Form MCS-80 D Form MCS-60

A Form MCS-90 Form MCS-90 provides evidence of financial responsibility, on behalf of the motor carrier, to the Interstate Commerce Commission (ICC). The endorsement must be included on all policies, and a policy must meet the financial responsibility requirements of the Department of Transportation.

Which of the following is not covered under the BAP specified causes of loss coverage? A Glass breakage B Malicious mischief C Flood D Earthquake

A Glass breakage Specified perils include fire, lightning, or explosion; theft; windstorm, hail, or earthquake, flood, mischief or vandalism, and the sinking, burning, collision or derailment of a conveyance transporting the covered vehicle.

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 may be written on owned private passenger autos D Coverage is primary on owned autos and excess on non-owned autos

A Uninsured Motorist Coverage is included in Section II

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

B Advertising liability Advertising liability would be available under a CGL policy.

Section III of the Garage Coverage Form provides which coverage? A Liability for owned vehicles that are used in the business B Garagekeepers coverage C Products liability D Liability for garage operations

B 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 Commercial Auto coverage are true, except: A The most frequently used commercial auto policy is the Business Auto Coverage Form B Section II of the Garage Coverage Form does not include completed operations coverage C The Business Auto Coverage Form will cover liability from transporting mobile equipment D Section II of the Garage Coverage Form does not provide physical damage coverage to a customer's car

B Section II of the Garage Coverage Form does not include completed operations coverage The Garage Coverage Form - Section II does cover completed operations.

Which of the following losses would be paid under the Business Auto coverage form's Comprehensive coverage? A A covered auto was involved in a collision with another automobile B A covered auto experienced a mechanical breakdown causing a need for repair C A covered auto was stolen and never recovered D A covered auto was damaged when it accidentally slipped out of park and rolled down a hill and hit a power pole

C A covered auto was stolen and never recovered Comprehensive coverage provides coverage for anything other than collision, that is not excluded. Mechanical breakdown is specifically excluded, the other two choices are examples of Collision.

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 Truckers Coverage Form B Business Auto 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 of the following provides coverage for a semi tractor pulling an empty trailer called 'bobtailing'? A Trip transit coverage form B Motor Truck Cargo Policy C Truckers coverage form D Inland Marine Form

C Truckers coverage form Truckers coverage form is a type of Commercial Auto that covers a trucker including a tractor with no trailer called deadheading or a tractor pulling an empty trailer called bobtailing. A Motor truck cargo policy is an inland marine policy that covers cargo liability. Inland Marine forms also cover cargo. Trip transit is a marine transit form.

Choose the statement that is false regarding the Business Auto Coverage Form. A Coverage may be written on owned private passenger autos B Medical payments coverage may be added by endorsement C Uninsured Motorist Coverage is included in Section II D Coverage is primary on owned autos and excess on non-owned autos

C Uninsured Motorist Coverage is included in Section II Section II of the BAP is liability and does not provide Uninsured Motorist coverage, which is available by endorsement only.

Which of the following is not a specified loss under the garagekeepers section of the Garage Coverage Forms? A Vandalism B Theft C Windstorm D Fire

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

Which Commercial Auto form would you use as bailee coverage for autos in your care? A Motor carrier coverage form B Business auto coverage form C Bailees auto coverage form In Commercial Auto - Garagekeepers coverage is 'Bailees' coverage for businesses engaged in servicing or repairing autos belonging to others in the insured's care.

D Garagekeepers coverage form In Commercial Auto - Garagekeepers coverage is 'Bailees' coverage for businesses engaged in servicing or repairing autos belonging to others in the insured's care.