Commercial Auto Policies
What is the definition of an "Auto" under a business auto policy?
"Auto" means a land motor vehicle or trailer designed for travel on public roads. It does not include mobile equipment. Self-propelled vehicles with the following types of permanently attached equipment are autos, not mobile equipment: Equipment designed and used primarily for: snow removal; road maintenance, but not construction or resurfacing; or street cleaning. Cherry pickers and similar devices mounted on automobile or truck chassis and used to raise or lower workers Air compressors, pumps and generators, including spraying, welding, building cleaning, geophysical exploration, lighting and well-servicing equipment
What does the "Loan/Lease Gap Coverage Endorsement" cover?
"Gap" coverage is one of the most useful endorsements available to an insured. This endorsement modifies the standard policy to increase the limits of liability for damage to a covered auto to fill the "gap" between the actual cash value of the vehicle and the amount owed for a loan or lease on the vehicle, if that loan amount is higher than the ACV. In addition to any payments (minus deductibles, of course) made under the property damage coverage, if the vehicle is deemed a total loss and the amount owed under loan or lease is greater than the amount paid, the carrier will pay any extra amount equal to the difference between the actual cash value already paid and that amount owed for the vehicle loan or lease. This coverage applies only if the insured carries coverages for both comprehensive and collision.
What is the definition of "Permanently attached equipment" under the Property Section of a commercial auto policy?
"Permanently attached equipment" or "PAE" means equipment and devices that are permanently installed or attached to the named insured's insured auto. Permanently attached equipment also includes: accessories designed to work as part of the equipment or devices; load securing equipment and devices; and custom paint or decals.
What is the difference between a hired auto and a non-owned auto?
A "hired" auto is an auto that is leased, hired, or borrowed by the named insured. A non-owned auto is an auto that is not owned by the named insured and is used by people besides the named insured to carry out the named insured's business. One example would be a situation where an employee of the named insured uses his or her own car while doing things that are connected to the named insured's business.
Does a commercial auto policy offer boldly injury coverage under the liability section for a fellow employee?
Bodily injury is not covered if it is to: a. a fellow employee of an insured injured while within the course of their employment or while performing duties related to the conduct of the named insured's business; or b. the spouse, child, parent, brother, or sister of that fellow employee as a consequence of Paragraph a. above.
What does the War Exclusion exclude?
Bodily injury or property damage is not covered if it arises directly or indirectly out of: war, including undeclared or civil war; warlike action by a military force, including action in hindering or defending against an actual or expected attack, by any government, sovereign or other authority using military personnel or other agents; or insurrection, rebellion, revolution, usurped power, or action taken by governmental authority in hindering or defending against any of these.
How are "Covered Automobiles" described in a business auto policy?
Covered automobiles in a commercial policy are described in terms of the risks covered and types of exposures presented by each category of vehicle.
What does the "Mobile Equipment as Insured Auto Endorsement" cover?
Exactly as the name would imply, this endorsement extends coverage to mobile equipment as defined earlier in this lesson. If the insured has added endorsements for "hired auto" or "Non-Owned Auto," then this coverage will also apply to "hired" or "non-owned" mobile equipment.
What are the four symbols for covered autos in a business commercial auto policy?
Covered autos are grouped into categories called symbols. Commercial Auto "symbols" are represented by a number: Symbol 1 Short Description: Any "Auto" Symbol 2 Short Description: Owned "Autos" Only Definition: Only those "autos" the named insured owns (and for Liability Coverage any "trailers" the named insured doesn't own while attached to power units the named insured owns). This includes those "autos" the named insured acquires ownership of after the policy begins. Symbol 3 Short Description: Owned Private Passenger "Autos" Only Definition: Only the private passenger "autos" the named insured owns. This includes those private passenger "autos" the named insured acquires ownership of after the policy begins. Symbol 4 Short Description: Owned "Autos" Other than Private Passenger "Autos" Only Definition: Only those "autos" the named insured owns that are not of the private passenger type (and for Liability Coverage any "trailers" the named insured doesn't own while attached to power units the named insured owns). This includes those "Autos" not of the private passenger type the named insured acquires ownership of after the policy begins. Symbol 5 Short Description: Owned "Autos" Subject to No-Fault Definition: Only those "autos" the named insured owns that are required to have No-Fault benefits in the state where they are licensed or principally garaged. This includes those "autos" the named insured acquires ownership of after the policy begins provided they are required to have No-Fault benefits in the state where they are licensed or principally garaged. Symbol 6 Short Description: Owned "Autos" Subject to a Compulsory Uninsured Motorist Law Definition: Only those "autos" the named insured owns that because of the law in the state where they are licensed or principally garaged are required to have and cannot reject Uninsured Motorist Coverage. This includes those "autos" the named insured acquires ownership of after the policy begins provided they are subject to the same state uninsured motorist requirement. Symbol 7 Short Description: Specifically Described "Autos" Definition: Only those "autos" described in the Declarations for which a premium charge is shown (and for Liability Coverage any "Trailers" the named insured doesn't own while attached to a power unit described as a "Specifically Described Auto").' Symbol 8 Short Description: Hired "Autos" Only Definition: Only those "autos" the named insured leases, hires, rents, or borrows. This does not include any "auto" the named insured leases, hires, rents, or borrows from any of the named insured's "employees", partners (if the named insured is a partnership), members (if the named insured is a limited liability company) or members of their household. Symbol 9 Short Description: Non-owned "Autos" Only Definition: Only those "autos" the named insured does not own, lease, rent or borrow that are used in connection with the named insured's business. This includes "autos" owned by the named insured's "employees", partners (if the named insured is a partnership), members (if the named insured is a limited liability company), or members of their households but only while used in the named insured's business or personal affairs. Symbol 10 Short Description: Covered Auto Designation Definition: Write-your-own designation commonly used to describe which autos are to be given physical damage coverage (e.g. all autos in the first five model years). This symbol is only available through an endorsement. Symbol 19 Short Description: Mobile Equipment Subject to Financial Responsibility Laws Definition: Mobile equipment that would normally be excluded from coverage but is included by a state law as a vehicle subject to financial responsibility laws.
Which exclusions apply only to Auto Dealers?
False Pretense: The insurer will not pay for loss to a covered auto caused by or resulting from someone causing an insured to part with property by trick or scheme or if the insured acquires an auto from a seller who did not have legal title. In addition, the insurer will not pay for: an auto dealer's expected profits, including loss of market value or resale value; loss to any covered auto displayed or stored at a location not listed in the Declarations if the loss occurs more than 45 days after the insured begins using the location; loss to any covered auto due to "Collision" while the covered auto is being driven or transported from the point of purchase (or distribution) to its destination if such points are more than 50 road miles apart; or loss to any covered auto under the "Specified Cause of Loss Coverage" caused by or resulting from the collision or upset of any vehicle transporting it.
What are the names of the two entities that draft standardized policies?
ISO and AAIS
What does Coverage for Temporary Substitute Autos cover?
If a temporary substitute auto is involved in a loss, the insurer will provide the same coverage and deductible that would have applied to the insured auto for which it is a substitute. The most the insurer will pay for loss to a temporary substitute auto is the lesser of the Actual Cash Value at the time of loss or the cost of repairing or replacing the damaged or stolen property with like kind and quality, less the applicable deductible.
What is the Additional Payments?
If the named insured has paid the premium for Comprehensive Coverage, Collision Coverage, or Fire and Theft with Combined Additional Coverage, then in addition to the insurer's Limit of Liability, the insurer will pay: all reasonable expenses necessary to return a stolen insured auto to the named insured, unless the insurer determines the auto to be a total loss; or all reasonable expenses necessary to remove an insured auto from the site of an accident or loss and transport it to a repair facility.
What does the Pet Injury Coverage cover?
If the named insured has purchased Collision Coverage for at least one insured auto listed on the declarations page, Pet Injury Coverage is included in the named insured's policy. If a pet sustains injury or death while inside an insured auto at the time of a loss covered under Collision, Comprehensive, or Fire & Theft with Combined Additional Coverage, the insurer will pay: for reasonable and customary veterinary fees incurred by the named insured or the owner of the pet if the pet is injured in, or as a direct result of, the covered loss; or a death benefit if the pet dies in or as a direct result of the covered loss. In the event of a covered loss due to the theft of an insured auto, the insurer will provide the death benefit provided the pet is not recovered. The following additional Limits of Liability apply to Pet Injury Coverage: The most the insurer will pay for all damages in any one loss is a total of $1,000 regardless of the number of pets involved If the pet dies in, or as a direct result of, a covered loss, the insurer will provide a death benefit of $1,000, less any payment the insured made toward veterinary expenses for the pet No deductible shall apply to this coverage
What does the "Additional Insured - Lessor Endorsement" cover?
Leased vehicles are considered owned autos by the attachment of the Additional Insured - Lessor Endorsement.
Who is the Motor Carrier Coverage Form for?
Motor carriers are anyone who is transporting material in a commercial operation, whether "hired" or not. This could include the owner, him/herself, private passenger vehicles used for this purpose, etc. While the coverage offered is very similar to the Business Auto coverage form, it provides for the unique needs of motor carriers as well. For example, a motor carrier is protected even if it's pulling an empty trailer (technically a "non-trucking purpose"). Motor carriers coverage also applies to a commercial operation transporting passengers, such as a bus, taxi, etc.
What does the Care, Custody, or Control exclusion exclude?
Property damage to, or covered pollution cost or expense involving, any property owned by, rented to, being transported by, used by, or in the care, custody or control of the insured, including any motor vehicle operated or being towed is not covered. This exclusion does not apply to liability assumed under a sidetrack agreement.
What does the "Property Protection Coverage" endorsement do?
Property protection coverage specifically provides coverage if an insured's auto damages a parked vehicle or a piece of fixed property (e.g. buildings, lamp posts, and fences). The property protection coverage only applies to accidents that occur in the state of Michigan.
What happens if two or more coverage forms or policies are issued by the same carrier and apply to the same type of accident?
Should a business auto policy and another policy issued by the same insurer apply to the same type of accident, the aggregate maximum limit of liability for all the policies will not exceed the highest applicable limit of liability found in the policies. This condition does not apply to a policy that is specifically meant to be excess insurance.
What does the "Medical Payments Coverage Endorsement" cover?
Similar to the personal injury endorsement, under this endorsement, the carrier will pay for reasonable and necessary expenses, incurred within three (3) years from the date of an accident, for medical and funeral services because of bodily injury: sustained by an insured; caused by an accident; and arising out of the ownership, maintenance or use of a motor vehicle or trailer. Unlike the personal injury endorsement, however, any dispute as to the usual and customary charge will be resolved between the service provider and the carrier, not the insured. However, this endorsement is for medical and funeral expenses only. No additional coverages are provided.
What is Collision Coverage in a commercial auto policy?
Subject to the Limits of Liability, if the named insured pays the premium for Collision Coverage, the insurer will pay for loss to the named insured's insured auto and its permanently attached equipment when it collides with another object or overturns.
What is the "Each Person" Liability limit?
The "each person" bodily injury liability limit listed on the declarations page for the insured auto involved in the accident is the maximum the insurer will pay for bodily injury sustained by any one person in any one accident, and that "each person" maximum limit will apply to the aggregate of claims made for such bodily injury and any and all claims derived from such bodily injury including, but not limited to, loss of society, loss of companionship, loss of services, loss of consortium, and wrongful death.
What are the five sections in a business auto coverage form?
The Business Auto Coverage Form is divided into five sections: Section I - Covered Autos. Provides a description of the covered autos identified by "Symbols" Section II - Liability Coverages Section III - Physical Damage Coverages Section IV - Business Auto Conditions Section V - Definitions
What does the liability section of the commercial business auto policy cover?
The carrier will pay damages, other than punitive or exemplary damages, for bodily injury, property damage, and covered pollution cost or expense, for which an insured becomes legally responsible because of an accident arising out of the ownership, maintenance or use of that insured auto. However, the carrier will only pay for the covered pollution cost or expense if the same accident also caused bodily injury or property damage to which this insurance applies.
What does the "Non-Owned Trailer Physical Damage Coverage Endorsement" cover?
The endorsement provides comprehensive and collision coverages for non-owned trailers and their equipment.
What are the standard exclusions in an auto dealers policy?
The following exclusions are included in the standard Auto Dealers Coverage form: Expected or intended injury Employee injury Damage to property in the dealer's care, custody, or control (This does not include items covered by symbol 30) War Nuclear hazard Racing, demolition contests, and stunts Wear, tear, and breakdown
What is the coverage territory for a commercial auto policy?
The insurer provides coverage for accidents and losses that occur during the policy period and within the coverage territory. The coverage territory includes the following: The United States of America U.S. territories and possessions Puerto Rico Canada The coverage territory extends to the whole world if certain conditions are met.
What does the Transportation cover?
The insurer will pay up to $30 per day, up to a maximum of $900, for temporary transportation expenses incurred by the named insured because of the theft of an insured auto that is a private passenger auto. This coverage applies only to those insured autos for which the named insured carries Comprehensive Coverage. The insurer will pay for temporary transportation expenses incurred during the period beginning 48 hours after the named insured reports the theft to the insurer, and ending when the insured auto is returned to use, or the insurer pays for its loss.
What is the Loss Payment -- Physical Damage Coverages Condition?
The insurer, at their option may do any of the following: Pay for, repair, or replace damaged or stolen property Return stolen property Take damaged or stolen property at an agreed or appraised value
What are the primary rating factors for setting commercial auto premiums?
The primary rating factors used to set the premiums relative to limits of coverage for Commercial Autos are: The current value and original cost of the vehicle; Use (Service, Commercial, or Retail); Territory where the vehicle is principally garaged (which may or may not be the location of the actual business); Radius of Operation (under 50 miles [short haul], 50 to 200 miles [intermediate haul], and over 200 miles [long haul]); or The gross weight of the vehicle (GVW) or seating capacity if used to haul passengers.
Who is covered under the Truckers and Motor Carriers Form?
These policy forms provide coverage for truckers, trucking firms, and other types of motor carriers. These two policy forms are very similar, and yet have some significant key differences between them. The symbols used under these forms are different both to distinguish vehicles covered under a relevant policy from vehicles with identical coverage that are covered under a standard CAP and to identify new types of exposures under this coverage.
What is the "Deductible Liability" Endorsement?
This endorsement adds deductibles to liability coverages for bodily injury, property damage or both. This endorsement is used when an insured is looking for means to reduce premium costs without sacrificing coverages.
What does the "Uninsured/Underinsured Motorist Endorsement" cover?
This endorsement adds standard uninsured/underinsured motorist coverages, similar to those found in a personal auto policy, to the commercial auto coverage.
What does the "Cancellation and Nonrenewal Endorsement" do?
This endorsement allows the insured to cancel a policy on an effective future date by notifying the carrier of the date they wish cancellation to take effect. All other terms of this endorsement otherwise regarding cancellation by either the insured or the carrier remain consistent: at the carrier's option within the first 60 days of coverage with proper notice, for non-payment of premium with proper notice, etc.
What does the "Pollution Liability - Broadened Coverage" endorsement cover?
This endorsement extends insurance coverage to apply to a "covered pollution cost or expense." Covered pollution costs or expenses are costs or expenses that come out of a request, demand, order, or statutory or regulatory requirement that an insured deal with the effects of pollutants. Pollution costs or expenses are also covered if they arise from a claim or lawsuit filed by or on behalf of a governmental authority. Pollution costs or expenses are not covered under this endorsement if they a result of a release of pollutants under the following specific conditions: Some pollutants were released before the pollutants (or the container they were stored in) were moved from the place where the insured accepted them into or onto the covered auto. Some pollutants were released after the pollutants (or the container they were stored in) were moved from the covered auto to the place where they were delivered, disposed of, or abandoned. If one of the above two conditions apply, the pollution cost or expense may still be covered if maintenance or use of the covered auto caused the pollutants (or the container they were stored in) to be upset, overturned, or damaged and that directly caused a release of pollutants.
What is the Public Liability Endorsement for Motor Carrier Policies of Insurance?
This endorsement provides evidence of financial responsibility, on behalf of the motor carrier, to the Interstate Commerce Commission (ICC). The endorsement must be included in any policy, and the policy must meet the DOT financial responsibility requirements, including the following: No condition, provision, stipulation, or limitation contained in the policy will relieve the insurer from liability (absolute liability for the insurer) If the insurer is required to pay an excluded loss (under the policy), it may seek reimbursement from the insured Coverage is in effect until terminated (continuous) An insurer must give notice at least 35 days' advance notice of cancellation
What does the Trailer Interchange Coverage Endorsement cover?
This endorsement provides property damage coverages for non-owned trailers and shipping containers. The insured must be operating under a written agreement for use of the trailers in order for coverage to apply. Coverages provided include both comprehensive and collision coverages. Collision includes "overturn" of the trailer Comprehensive includes all other forms of loss other than collision or overturning
What does the "Employees as Additional Insureds Endorsement" cover?
Under commercial auto coverage forms, the business can protect itself against exposures related to accidents involving owned, hired, borrowed or non-owned autos, including employee owned autos used in the insured's business. When employees use personally owned vehicles in the insured's business, the business is covered (SYMBOL 9) for liability exposures, however the employee is not. In addition, the employee's personal auto policy may limit or even exclude coverage for that employee while using his/her personal auto for business purposes. The Employees as Additional Insureds endorsement extends coverage to the employee when his/her auto is used in the insured's business or for personal affairs of the named insured. This coverage insures the employee for business use of their own autos and/or autos owned by family members, but it does not protect other family members whose vehicle is being used by that employee.
When used in Part I - Liability To Others, what more does the term "insured auto" include?
When used in Part I - Liability To Others, insured auto also includes: trailers designed primarily for travel on public roads, while connected to the named insured's insured auto that is a power unit; mobile equipment while being carried or towed by an insured auto; and any temporary substitute auto.
How does the declaration page in a business commercial auto policy look?
the declarations page will be arranged as a table with headings that look like this: COVERAGES COVERED AUTOS Entry of one or more of the symbols from the Covered Autos Section of the Business Auto Coverage Form shows which Autos are covered autos LIMIT The most the insurer will pay for any one accident or loss PREMIUM
What is a Specified Cause of Loss Coverage (with or without fire and theft)?
A Business Auto policy may also be paired with a Specified Cause of Loss form, which is a more affordable alternative to "all-risk coverage". Sometimes referred to as either "Other Than Collision" or "Combined Additional Coverages (CAC)" a Specified Cause of Loss policy doesn't cover as many events in which a vehicle is lost or damaged as a comprehensive policy, It's often bundled with fire and theft. Under this named peril form, any peril not listed is not covered. In other words, as a named-perils policy, it only covers the losses itemized in the insuring agreement. For example, a cracked windshield caused by a stone kicked up by a truck would not be covered. Specified Losses (or CAC) with Fire and Theft will typically cover the named insured's auto and its permanently attached equipment when damage or loss is due to the following: fire, lightning, or explosion; theft; windstorm or hail; earthquake; flood or rising water; malicious mischief or vandalism; the stranding, sinking, burning, collision, or derailment of any conveyance in or upon which the named insured's insured auto is being transported; or collision with a bird or animal. No losses other than those specifically described in the insuring agreement will be covered under Part II of this policy. If the policy only has Specified Losses coverage and not fire and theft, the first two causes of damage or loss in the list above would not be covered.
What is an "Insured Auto?
An Insured Auto means any vehicle shown on the declarations page or any other vehicle the named insured acquires, so long as the named insured notifies the carrier that the named insured has added it within 30 days.
What is the Appraisal for Physical Damage or Loss Condition?
An insured who disagrees with insurer's determination of the value of a loss can demand another appraisal of the loss. The process involves both the insurer and insured selecting an appraiser and the chosen appraisers selecting an impartial umpire. Each appraiser will submit their own evaluation of the value of the loss. If they disagree, the matter will be given over to the umpire. Ultimately a binding decision on the value of the loss will be made. The insurer is still permitted to reject the insurance claim even if they submit to the appraisal.
Is a "Replacement Auto" covered?
Any replacement auto is covered on the date the insured becomes the owner if: the insured acquires the auto during the policy period shown on the declarations page; and the auto that is acquired replaces one specifically described on the declarations page due to termination of the insured's ownership of the replaced auto or due to mechanical breakdown of, deterioration of, or loss to the re-placed auto that renders it permanently inoperable.
What is the Garagekeepers Coverage Form?
Auto dealers purchase Garagekeepers Coverage as part of their Auto Dealers coverage. However, a Garagekeepers Coverage form provides the garagekeepers (symbol 30) coverage found in an Auto Dealers Coverage form to businesses that are not normally eligible for coverage under an Auto Dealers Coverage form. A Garagekeepers Coverage form is designed for the following businesses: Service stations Businesses that have a valet parking service Parking lots and parking garages Car washes Any organization that, for a fee, will take custody of vehicles that belong to other parties
Under what circumstances if boldily injury excluded under the liability section of a commercial business auto policy?
Bodily injury is not covered if it is to: a. an employee of any insured arising out of or within the course of: that employee's employment by any insured; or performing duties related to the conduct of any insured's business; or b. the spouse, child, parent, brother or sister of that employee as a consequence of Paragraph a. above. This exclusion applies: a. whether the insured may be liable as an employer or in any other capacity; and b. to any obligation to share damages with or repay someone else who must pay damages because of the injury. This exclusion does not apply to bodily injury to a domestic employee if benefits are neither paid nor required to be provided under any workers' compensation, disability benefits, or similar law, or to liability for bodily injury assumed by the insured under an insured contract. For the purposes of this policy, a domestic employee is a person engaged in household or domestic work performed principally in connection with a residence premises.
What does the Completed Operations Exclusion exclude?
Bodily injury or property damage arising out of, or caused by, the named insured's work after that work has been completed or abandoned. For purposes of this exclusion, the named insured's work means: a. work or operations performed by the named insured or on the named insured's behalf; b. materials, parts, or equipment furnished in connection with such work or operations; and c. the delivery of liquids. The named insured's work includes warranties or representations made at any time with respect to the fitness, quality, durability, or performance of any of the items included in Paragraphs a., b., or c. above. The named insured's work will be deemed completed at the earliest of the following times: When all of the work called for in the named insured's contract has been completed; When all of the work to be done at a particular site has been completed if the named insured's contract calls for work at more than one site; When that part of the work done at a job site has been put to its intended use by any person or organization other than another contractor or subcontractor working on the same project; Work that may need service, maintenance, correction, repair, or replacement, but which is otherwise complete, will be treated as completed
What does the Racing Exclusion exclude?
Bodily injury or property damage is not covered if it arises out of the named insured or another insured participating in, or preparing for, a prearranged or organized racing, speed, or demolition contest, stunting activity, or performance contest.
What does the Pollution exclusion exclude in a commercial auto policy?
Bodily injury or property damage is not covered if it results from or is caused by the actual, alleged, or threatened discharge, dispersal, seepage, migration, release, or escape of any pollutants: a. that are, or that are contained in any property that is being transported or towed by, handled, or handled for movement into, onto, or from, the insured auto; otherwise in the course of transit by or on behalf of the insured; or being stored, disposed of, treated, or processed in or upon the insured auto; b. before the pollutants or any property in which the pollutants are contained are moved from the place where they are accepted by the insured for movement into or onto the insured auto; or c. after the pollutants or any property in which the pollutants are contained are moved from the insured auto to the place where they are finally delivered, disposed of, or abandoned by the insured. The above Paragraph a. of this exclusion does not apply to fuels, lubricants, fluids, exhaust gasses, or other similar pollutants that are needed for or result from the normal electrical, hydraulic, or mechanical functioning of the insured auto or its parts, if: the pollutants escape, seep, migrate, or are discharged, dispersed, or released directly from an insured auto part designed by its manufacturer to hold, store, receive, or dispose of such pollutants and is a part that would be required for the customary operation of the insured auto; and the bodily injury, property damage, or covered pollution cost or expense does not arise out of the operation of any equipment listed in Paragraphs b. and c. of the definition of auto.
What does the Handling of Property exclusion exclude?
Bodily injury or property damage is not covered if it results from or is caused by the handling of property: before it is moved from the place where it is accepted by the insured for movement into or onto the named insured's insured auto; or after it has been moved from the named insured's insured auto to the place where it is finally delivered by the insured.
What does the Movement of Property by Mechanical Device exclusion exclude?
Bodily injury or property damage is not covered if it results from or is caused by the movement of property by a mechanical device, other than a hand truck, not attached to an insured auto.
What does the Operations Exclusion exclude?
Bodily injury, property damage, or covered pollution costs or expenses are not covered if they arise out of the operation of: any equipment listed in Paragraphs b. and c. of the definition of auto; or machinery or equipment that is on, attached to, or part of, a land vehicle that would qualify under the definition of mobile equipment if it were not subject to a compulsory or financial responsibility law where it is licensed or principally garaged.
What are the five forms of commercial auto policies?
Business Auto Coverage form A Business Auto Coverage form is utilized by the majority of organizations who have a need for commercial auto coverage. Truckers Coverage form Truckers Coverage forms are used by common carriers and contract carriers who haul goods that belong to another party. Motor Carrier Coverage form A Motor Carrier Coverage form is designed to provide coverage for carriers that are both private and contract/common. What this means is that this coverage form is for carriers who transport their own property and the property of others. Garage Coverage form A Garage Coverage form provides coverage similar to commercial general liability coverage to franchised or non-franchised automobile dealers. Garagekeepers Coverage form A Garagekeepers Coverage form covers the liability associated with any business that temporarily takes control over another party's auto. This can include parking garages, valet parking services, repair garages, car washes, towing companies, and automobile dealers.
What are the exclusions under the liability section of a business commercial auto policy?
Expected or Intended Injury Any liability assumed by an insured under any contract or agreement is not covered, unless the agreement is an insured contract that was executed prior to the occurrence of any bodily injury or property damage. However, this exclusion does not apply to liability for damages that an insured would have in the absence of the contract or agreement. Any obligation for which an insured or an insurer of that insured, even if one does not exist, may be held liable under workers' compensation, unemployment compensation, disability benefits law, or any similar law. An accident for which any person is insured under nuclear energy liability insurance is not covered. This exclusion applies even if the limits of that insurance are exhausted.
If the insured has liability coverage under the policy, what other types of vehicles are also covered autos for liability coverage?
If the insured has liability coverage under the policy, the following types of vehicles are also covered autos for liability coverage. Trailers with a load capacity of 2,000 pounds or less designed primarily for travel on public roads Mobile equipment while being carried or towed by a covered auto Any auto not owned by the insured while used with permission of the owner as a temporary substitute auto while the insured's auto is out of service, because of: breakdown, repair, servicing, "loss," or destruction.
What does "Salvage" mean in a commercial auto policy?
If the insurer pays the actual cash value of the named insured's auto less the deductible, or if the insurer pays the amount necessary to replace the named insured's auto less the deductible, the insurer is entitled to all salvage. If the named insured's auto is a total loss and the insurer pays the applicable Limit of Liability or Stated Amount as shown on the declarations page less the deductible, the insurer is entitled to the same percent of salvage as the insurer's payment bears to the actual cash value of the named insured's auto.
What is the "Combined Bodily Injury and Property Damage Limits"?
If the named insured's declarations page indicates that combined bodily injury and property damage limits apply for "each accident" or "combined single limit" applies, the most the insurer will pay for the aggregate of all damages and covered pollution cost or expense combined, resulting from any one accident, is the combined liability insurance limit shown on the declarations page for the insured auto involved in the accident. In other words, the limit for both bodily injury and property damage are expressed as a single limit.
What are the coverages listed in a business commercial auto policy?
Liability Personal Injury Protection (or Equivalent No-Fault Coverage) Auto Medical Payments Uninsured Motorists Underinsured Motorists (When not included in Uninsured Motorist Coverage) Physical Damage: Comprehensive Damage Physical Damage: Specified Cause of Loss Coverage Physical Damage: Collision Coverage Physical Damage: Towing and Labor
What does the Liability section cover in an auto dealer's policy?
Liability coverages for covered autos under garage operations are substantially unchanged from any other commercial auto policy. However, the auto dealers policy form includes liability for both Premises and Operations Liability and Completed Operations Liability. Premises and Operations coverage extends to any bodily injury or property damage liability presented by the operation of an auto/garage facility with all of its attendant risks and exposures. Completed Operations provides liability for damages arising out of work performed. If, for example, a repair is performed in error and the faulty repair is the direct result of further damage, the carrier would pay the claim for the additional damages. Completed Operations coverage is subject to a mandatory $100.00 deductible. Other liability-related coverages which are available in connection with Auto Dealers coverage are Medical Payments, Uninsured Motorists, and Underinsured Motorists coverage.
What does the "Blanket Waiver of Subrogation Endorsement" cover?
Many business contracts will require one party to indemnify, or protect, the other party from loss or claims. This would include subrogation rights of the insured's carrier in the event of a loss caused by that other party. This endorsement allows the insured to enter this type of contract. For an additional premium, the carrier agrees to waive its right to subrogation under this policy if the insured has executed a written agreement to that effect prior to a loss.
What additional payments will a carrier make under the policy?
Similar to a personal auto policy, the carrier will make the following payments in addition to the limits of liability: All expenses that the carrier incurs in the settlement of any claim or defense of any lawsuit Interest accruing after entry of judgment on that part of the judgment that does not exceed the carrier's Limit of Liability. This payment does not apply if the carrier has not been given notice of suit or the opportunity to defend an insured The carrier's payment, offer in writing, or deposit in court of that part of the judgment which does not exceed the Limit of Liability ends the carrier's duty to pay interest which accrues after the date of the payment, written offer, or deposit. The premium on any appeal bond or attachment bond required in any lawsuit the carrier defends (the carrier has no duty to purchase a bond in a principal amount exceeding the Limit of Liability and has no duty to apply for or furnish these bonds) Up to $2,000 for cost of bail bonds required because of a covered accident (the carrier has no duty to apply for or furnish these bonds) Reasonable expenses incurred by an insured at the request of the carrier, including loss of earnings up to $250 a day All court costs taxed against the insured in any "suit" against the insured which the carrier defends (these payments do not include attorneys' fees or attorneys' expenses taxed against the insured)
What does the "Blanket Additional Insured Endorsement" cover?
Standard practice is for a policy holder to contact the carrier or agent whenever an additional insured needs to be added to the policy. This is often a requirement, for example, in many standard business contracts in which one party agrees to indemnify another by adding them to existing insurance coverage as an additional insured. Each additional insured may or may not come with an additional premium. Some organizations, however, may need to routinely add and remove additional insureds to and from their coverages due to the nature of their business. For these types of situations, this endorsement is ideal. For a specified premium, the insured can add any additional insured to the policy at will by executing a written agreement with the new additional insured to that effect. As long as the agreement is executed prior to any loss occurrence, then coverage will be allowed. This will be secondary insurance for the additional insured if they carry any other applicable coverage and will only apply to the extent that the additional insured is also liable for the insured's actions or operations.
What is Comprehensive Coverage in a commercial auto policy?
Subject to the Limits of Liability, if the named insured pays the premium for Comprehensive Coverage, the insurer will pay for loss to the named insured's insured auto and its permanently attached equipment from any cause other than those covered under Collision Coverage. Any loss caused by missiles, falling objects, fire, theft, collision with an animal, or accidental glass breakage shall be deemed a Comprehensive loss. However, the named insureds have the option of having glass breakage caused by a covered auto's collision or overturn considered a loss under Collision Coverage.
What is the "each accident" liability limit in an insurance policy?
Subject to the bodily injury liability limit for "each person", the "each accident" bodily injury liability limit listed on the declarations page for the insured auto involved in the accident is the maximum the insurer will pay for bodily injury sustained by two or more persons in any one accident, including all derivative claims which include, but are not limited to, loss of society, loss of companionship, loss of services, loss of consortium, and wrongful death. The "each accident" property damage liability limit listed on the declarations page for the insured auto involved in the accident is the maximum the insurer will pay for the aggregate of all property damage and covered pollution cost or expense combined, sustained in any one accident.
What are the symbols under a motor carrier coverage form?
Symbol 61 Short Description: Any Auto Symbol 62 Short Description: Owned Autos Only Symbol 63 Short Description: Owned Private Passenger Autos Symbol 64 Short Description: Owned Commercial Autos Only Symbol 65 Short Description: Owned Autos subject to No-Fault Symbol 66 Short Description: Owned Autos Subject to Compulsory Uninsured Motorist Law Symbol 67 Short Description: Specifically Described Autos Symbol 68 Short Description: Hired Autos Only Symbol 69 Short Description: Trailers in Your Possession Under a Written Trailer or Equipment Interchange Agreement Symbol 70 Short Description: Your Trailers in the Possession of Anyone Else Under a Written Trailer Interchange Agreement Symbol 71 Short Description: Nonowned Autos Only Significantly, this coverage applies when a carrier is pulling a trailer which belongs to someone else. Typically, if Joe is pulling Bob's trailer and damages it, Bob's coverage would apply. Under Joe's Motor Carriers coverage, Bob's trailer is covered. However, if this coverage is desired, Joe's contract would have to specify Symbol 48 in his coverage (Trailers in Your Possession Under a Written Trailer or Equipment Interchange Agreement), and Bob would have to include Symbol 49 in his contract, "Your Trailers in the Possession of Anyone Else Under a Written Trailer Interchange Agreement".
What symbols are used in the Auto Dealers Policy?
There are 11 symbols available under an Auto Dealer's policy: Symbol 21 Short Description: Any Auto Symbol 22 Short Description: Owned Autos Only Symbol 23 Short Description: Owned Private Passenger Autos Symbol 24 Short Description: Owned Autos Other than Private Passenger Autos Symbol 25 Short Description: Owned Autos subject to No-Fault Symbol 26 Short Description: Owned Autos Subject to Compulsory Uninsured Motorist Law Symbol 27 Short Description: Specifically Described Autos Symbol 28 Short Description: Hired Autos Only Symbol 29 Short Description: Non-Owned Autos Used in Your Garage Business Symbol 30 Short Description: Autos Left with You for Service, Repair, Storage or Safekeeping Symbol 31 Short Description: Dealer's Autos and Autos held for sale by Non-Dealers or Trailer Dealers (Physical Damage Coverage)
What does the "Contingent Liability Endorsement / Limited Liability Coverage for Non-trucking Use of an Automobile" cover?
This endorsement allows the business use of a normally insured vehicle for transporting property. This would include passenger vehicles, cargo vans, pickup trucks, etc. This endorsement specifically excludes any form of tractor / trailer coverage or liability or any liability associated with a trailer of any sort.
What does the "Hired Auto Coverage Endorsement" endorsement cover?
This endorsement amends the definition of insured to include a "hired auto" which is defined as "an auto the named insured leases, hires, rents, or borrows. This does not include any autos leased, hired, rented, or borrowed from any of the named insured's employees, partners (if the named insured is a partnership), members (if the named insured is a limited liability company) or member of their households." This has the net effect of extending liability coverage to hired autos.
What does the "Drive Other Car (DOC) - Broadened Coverage for Named Individuals endorsement" cover?
This endorsement extends the definition of a covered auto to include autos the named insured does not own, hire, or borrow while being used by the person named in the endorsement. The DOC endorsement is especially effective for a business that furnishes an auto to an employee. The employee is covered for business use of a covered auto under the Business Auto Coverage Form; however, personal use is excluded from coverage unless the DOC endorsement is added to the policy. The DOC endorsement also extends coverage to an auto borrowed or rented by an employee.
What does the "Employers Non-Ownership Liability Endorsement" cover?
This endorsement extends the definition of insured to non-owned autos. This extends liability coverage to vehicles not owned by the insured, but which may be used in the course and scope of business, such as vehicles belonging to employees, family members, etc. With this endorsement in place, any vehicle operated for business use is covered.
What does the "Individual Named Insured Endorsement" endorsement cover?
This endorsement is available only to Named Insureds that are "natural persons," not any form of business entity. An individual who is insured under a commercial auto policy may add this endorsement, however. This endorsement includes a spouse under the definition of "You," meaning the Insured, and adds inclusion for personal use vehicles owned by the insured and not used for business. In essence, for an individual who is also a business owner, this endorsement adds coverage to the commercial auto policy similar to that that would be found in a personal auto policy, insuring household vehicles, etc, and spouses, relatives, household members etc. Unlike a personal auto policy, however, there is no inclusion for any other types of vehicles other than passenger autos, light duty trucks, etc.
What does "Broad Form Products Coverage" do?
This endorsement is specifically for the Garage Coverage Form. What it does is remove the "Defective Products" exclusion. This added coverage is subject to the "Each Accident - Garage Operations - Other Than Covered Autos" limit of insurance and only applies to the amount of property damage to the named insured's products that exceeds $250 for any one accident.
What does the "Any Automobile Legal Liability Coverage Endorsement" do?
This endorsement removes the need for "covered autos" under liability coverage and extends coverage to any auto owned by the insured or used for any purpose in the course and scope of the insured's business.
What is the Motor Carrier Act of 1980?
This federal legislation authorizes the Department of Transportation (DOT) to enforce the financial requirements for motor carriers. The DOT has ruled that a motor carrier must either carry an insurance policy of certain minimum limits, or post a surety bond representing certain financial stability criteria when transporting passengers or cargo. The most common approach is the purchase of insurance. There are three limits of liability that are required by the Motor Carrier Act. The applicable limit of liability is determined by the type of cargo that is being transported. $750,000 for interstate transportation of nonhazardous property $1,000,000 for intrastate or interstate transportation of oil or other hazardous materials $5,000,000 for intrastate or interstate transportation of certain quantities of specific hazardous materials e.g. explosives, compressed gas, radioactive materials
What is the Motor Carrier Public Liability Surety Bond?
This form is used to form an agreement between a surety and a motor carrier. A surety is an organization that issues bonds in which they will step in to complete an obligation if the principal party to the surety bond fails to fulfil the obligation. In this case, the surety agrees to be responsible for the payment of any judgements against the principal party for public liability, property damage, and environmental restoration liability.
What is the Auto Dealers Form?
This policy form provides coverage for car dealerships, gas/service stations and parking garages. It provides the same essential coverage as a CGL and Business Auto policy combined.
What is Symbol 30 in an auto dealer's policy?
This provides coverage for damage/loss to any covered auto or equipment left with the insured, in his/her care, for service, repair, parking or storage.
What does Symbol 31 in an auto dealers policy cover?
This provides coverage for physical damage to autos owned by auto dealers, non-dealers, and trailer dealers who have a financial interest in those autos. This coverage form offers the same coverages as those of the Business Auto Coverage Form: Comprehensive or Specified Cause of Loss and Collision coverages, however, in addition to the exclusions found under Business Auto Coverage Form, this coverage form excludes certain exposures specific to auto dealers.
What are the symbols under a Truckers Coverage Form?
Truckers coverage applies to truckers or trucking firms that hold themselves out for hire, as opposed to truckers transporting materials for their employer in the course and scope of their employment. Symbol 41 Short Description: Any Auto Symbol 42 Short Description: Owned Autos Only Symbol 43 Short Description: Owned Commercial Autos Only Symbol 44 Short Description: Owned Autos subject to No-Fault Symbol 45 Short Description: Owned Autos Subject to Compulsory Uninsured Motorist Law Symbol 46 Short Description: Specifically Described Autos Symbol 47 Short Description: Hired Autos Only Symbol 48 Short Description: Trailers in Your Possession Under a Written Trailer or Equipment Interchange Agreement Symbol 49 Short Description: Your Trailers in the Possession of Anyone Else Under a Written Trailer Interchange Agreement Trailer interchange coverage provides physical damage coverage for truckers who may have a non-owned trailer in their possession or who may have an owned-trailer in the possession of another. In essence, this coverage provides that damage to any specific trailer will be covered under the policy of whichever trucker had possession and control of the trailer at the time of the accident.
What is the definition of an "Insured" under a business commercial auto policy?
With respect to a covered auto, an Insured is defined for purposes of this section as the policy holder and any person to whom the policy holder gives permission to use a covered vehicle, with the exception of: a person while he or she is working in the business of selling, leasing, repairing, parking, storing, servicing, delivering or testing autos, unless that business is the policy holder's business and it was so represented in the named insured's application; a person, other than one of the policy holder's employees, partners, members, officers, or director, or a lessee or borrower or any of their employees, while he or she is moving property to or from an insured auto; or the owner or anyone else from whom the insured auto is leased, hired, or borrowed unless the insured auto is a trailer connected to a power unit that is an insured auto. However, this exception does not apply if the insured auto is specifically described on the declarations page. For purposes of this subsection, an insured auto the named insured owns includes any auto specifically described on the declarations page.
Are Autos that the insured acquires after the policy covered?
With the exception of specifically described autos (Symbol 7), newly acquired autos are automatically covered for the remainder of the policy period. For a specifically described auto a newly acquired auto will be considered a covered auto only if: the insurer already covers all "autos" the insured owns for that coverage or it replaces an "auto" that had that coverage; and the insured informs the insurer within 30-days of acquisition.
