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CIC - Casualty > Business Auto > Flashcards

Business Auto Flashcards

1
Q

3 Types of Auto Coverages

A
  • Business Auto Coverage form
    • Motor Carrier Coverage
    • Auto Dealers Coverage Form
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2
Q

2 Coverages on BAP

A

Liability from ownership, maintenance or use of autos

Physical damage for loss to certain covered autos

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3
Q

Auto Decs Item 1 (5)

A

○ NI
○ Policy period
○ Form of business
○ Premium
○ Endorsements

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4
Q

Auto Decs Item 2 (3)

A

○ Coverages
○ Autos
- Limits

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5
Q

Mobile Equipment definition (what’s not mobile equipment 5)

A

§ Snow removal

§ Road maintenance, but not construction or resurfacing

§ Street cleaening

§ Cherry pickers or similar devices

Air compressors, pumps and generators

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6
Q

Covered Autos Designation Symbols (10)

A

3 and 4 are related
5 and 6 are related
8 and 9 are related

Symbol 1
- ANY auto liability
- Broadest liability coverage
- No need for other #’s

Symbol 2
- Owned Autos only
- Coverage for non-owned trailers while attached to owned autos

Symbol 3
- Private passenger autos owned at inception of policy and autos of same type acquired during policy
- Private passenger not defined. Determined by UW

Symbol 4
- Owned Autos Other than Private Passenger Autos Only
○ Same as symbol 3 but not private passenger

Symbol 5
- Owned Autos Subject to no-Fault
- For states requiring no fault benefits
- Includes newly acquired

Symbol 6
- Owned Autos Subject to Compulsory UM laws
- For states requiring uninsured motorist coverage

Symbol 7
- Specifically described autos
- Have to be scheduled on decs2
- Coverage for non-owned trailers attached to scheduled auto

Symbol 8
- Hired autos only
- Autos the NI leases, hires, rents, or borrows
- Doesn’t include autos leased, hired, rented or borrowed from employees, partners or members, or members of their households
- Can add liability and PD

Symbol 9
- Non-Owned Autos
- Autos the insured doesn’t
○ Own
○ Lease
○ Hire
○ Rent
○ Borrow
○ And these autos are used in connection with biz
- Includes autos owned by NI’s
○ Employees
○ Partners or members
○ Or members of their households

Symbol 19
- Mobile equipment subject to compulsory or Financial Responsibility or Other Motor Vehicle Insurnace Law Only
- States requiring mobile equipment have insurance
- Makes no reference to ownership of the mobile equipment
Should always be included if symbol 7 is used for liability coverage

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7
Q

Symbol 10 (2)

A

Customize coverage

Negotiated description to meet need of NI

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8
Q

Newly Acquired Autos (which symbols auto include it 7 / Symbol 7 when it applies 3)

A
  • Automatically included in these symbols
    ○ 1,2,3,4,5,6,19 (1-6 + 19)
  • Symbol 7
    ○ Auto Coverage IF
    § Insurer provides coverage for all owned autos or auto replaces previously owned auto with that coverage AND
    § Notifies insurer within 30 days of acquisition that you want coverage
    ○ Additional Auto will have coverages that ALL autos have
    ○ Replacement auto takes coverage of Auto it’s Replacing
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9
Q

Covered Autos - Certain Trailers 1 , Mobile Equipment 1, and Temp Sub Autos (3)

A

Covered autos for liability only

Trailers
§ Under 3k pounds

Mobile equipment
§ Carried or towed by covered auto

Temp Sub of an owned covered auto because of its
§ Breakdown
§ Repair
§ Servicing
§ Loss; or Destruction

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10
Q

Covered Autos Liability - Who is an Insured (2 and second one has 5 exceptions)

A

NI for any covered autos

Others with NI permission for covered auto the NI owns, hires, borrows EXCEPT (A OPEL)
○ Owner of a car you hire or borrow
○ Employee if auto is owned by them or their household
○ Auto business except in the NI’s (example of a brake shop testing the brakes on the NI’s car and crashes. NI gets coverage but auto shop doesn’t)
○ Loading or unloading from a covered autos (other than employees)
- Partner or member’s individually owned autos

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11
Q

Endorsements that Modify Insured Status (2 - First has 4, second has 3)

A

Individual NI
○ Giving personal auto coverage to an individual with a BAP and no personal policy
○ At least one Private passenger type vehicle must be on policy
○ Provides personal auto coverage for NI, their spouse and family as well as non-owned coverage
○ Non-owned doesn’t include any auto that is:
§ Owned by any family members
§ Furnished or made available for regular use
§ Used in “the business” of selling, servicing, repairing or parking autos
§ That is not a private passenger type, while working in any other business or occupation
○ Physical damage provided if provided under the BAP for the scheduled vehicle

Drive Other Car Coverage - Broadened Covered for NI
○ Personal use of non-owned auto but only to individual listed on endt
○ Only extends to spouse Coverages selected in decs can extend

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12
Q

Employees as Insureds Endt 2

A
  • Insured status to employee who use their own personal autos to conduct the NI’s business
  • Liability provided on an excess basis
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13
Q

Non-ownership Liability Coverage for Volunteers Endt 2

A

Extends coverage to volunteers using their personal autos to help the NI’s business

Provides coverage to anyone furnishing the auto to the volunteer but not owned by volunteer

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14
Q

Employee Hired Autos Endt 2

A

Insured status for an auto rented under an employee’s name for biz use with NI permission

Physical damage provided as auto is considered owned

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15
Q

Volunteer Hired Autos Endt 2

A

Rented under volunteers name and used to help NI business

Considered owned auto by NI

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16
Q

Lessor - AI and LP Endt 1

A

Leasing company requiring they are listed as LP and AI in policy

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17
Q

Employee as Lessor Endt 1

A

Leasing company requiring they are listed as LP and AI in policy

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18
Q

Employee as Lessor endt 1

A

Provide isnured status to employee who leases their auto to NI

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19
Q

Partners or members as insureds endt 1

A

Adding members or Partners as AI for covered autos

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20
Q

Hired Autos Specified as Covered Auto You Own endt 2

A

Insured status to owner of vehicle leased to NI as an owned auto.

On a primary basis but only for vehicle on the schedule

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21
Q

Designated Insured for Covered Autos Liability Coverage endt 1

A

For person or organization requiring they have AI status listed on policy

22
Q

Covered Autos Liability Coverage – Insuring Agreement (3 promises / Supp payments 3 / Out of state coverage extensions 3)

A

3 promises
○ Pay legal obligations for covered auto
○ Pay legal obligations for covered pollution cost or expense
○ Duty to defend

Supplementary Payments
○ All expenses insurer incurs
○ Up to $2k for bail bonds due to covered accident
○ Cost of bonds to release attachments

Out of State coverage extensions
○ Increase limit to comply with financial responsibility laws
○ Provides minimum amounts and types of other coverage
- No duplication of payments

23
Q

Covered Auto Liability Exclusions (12)

A

EW FU MW CCCHOPER

Expected Or Intended Injury

War

Fellow Employees

Unmanned Aircraft

Movement Of Property By Mechanical Device

Workers Comp

Contractual

Care, Custody Or Control

Completed Operations

Handling of Property

Operations

Pollution

Employee Indemnification and EL

Racing

24
Q

Auto Exclusion - Expected Or Intended Injury (Difference between GL)

A

No exception for self defense

25
Q

Auto Exclusion - Contractual (Exceptions 2 / Insured Contract definition - Difference from GL, Includes these agreements, doesn’t include 2 ….)

A

Two Exceptions
§ Insured contracts
§ Insured’s liability that would have been there in absence of the contract or agreement

Insured Contract Definition
§ No elevator maintenance agreement but rest is same as GL
§ Includes rental car or auto lease agreements
§ No physical unless indicated for rentals
§ Doesn’t include
□ Construction or demolition operations, within 50 feet of any railroad property
□ Auto Loaned, leased or rented with a driver
Contracts with common carrier

26
Q

Auto Exclusion - Employee Indemnification and EL (2 exclusions / 2 givebacks)

A

Excludes BI to an employee

Excludes consequential BI to injured employee’s family members

Give backs
§ BI to domestic employees not entitled to WC
- Liability assumed by insured under an insured contract

27
Q

Auto Exclusion - Care, Custody Or Control (Exception 1 / 6 endts)

A

Transportation of property

Exception
§ Sidetrack agreement (hitting rail car while backing up will cover rail car)

Endorsements (6) - GGO BLM!
§ Garagekeepers Coverage CA 99 37 10 13
§ Garagekeepers Coverage For Autos And Watercrafts CA 04 15 11 20
§ On‐hook Coverage CA 04 52 11 20
§ Legal Liability Coverage Form CP 00 40 10 12
§ Bailees Customers Coverage
- Motor Truck Cargo Coverage

28
Q

Auto Exclusion - Handling of Property (2 Exceptions)

A

BI or PD from handling of property
-Before being moved to load onto auto or after has been unloaded.

29
Q

Auto Exclusion - Movement Of Property By Mechanical Device (2 Exceptions)

A

Exceptions

Movement by hand truck

Movement of property by mechanical devise attached to covered auto

30
Q

Auto Exclusion - Operations (definition and one exclusion with 1 exception)

A

Operations exposures of cherry pickers and similar autos, self propelled autos with air compressors, pumps, generators including spraying, welding, building cleaning, geophysical exploration, lighting or well servicing equipment

Excludes operations of equipment unless subject to motor vehicle law requirement

31
Q

Auto Exclusion - Pollution (Definition / 4 Exclusions / 2 Exceptions)

A

Pollutants definition
§ Solid, liquid, gas or thermal irritant or contaminant, including smoke, vapor, soot, fumes, acids, alkalis, chemicals and waste. Waste includes recycled, reconditioned or reclaimed

BI and PD from pollutants excluded
§ Actual, alleged or threatened
§ Discharge, dispersal, seepage, migration, release of escape of pollutants

Excludes pollutants in property that is transported, towed, in transit, moved, stored, disposed of, treated or processed

Excludes before accepted movement

Excludes final delivery, disposal of or abandoned

Exceptions

Pollutants from necessary auto parts

In an accident away from premise if you were not the one carrying the pollutant and the pollutant was released as a result of the accident (example of insured’s car hitting a gas tanker. Wouldn’t be covered if insured was the gas tanker)

32
Q

Auto Exclusion - Racing (2 Exclusions)

A

Excludes track maintenance vehicles and anything associated with racing

Excludes preparation for racing

33
Q

Physical Damage - Loss Definition

A

Direct and accidental loss or damage

34
Q

Comprehensive Definition

A

Any cause except collision with another object or overturn

35
Q

Collision Definition

A

With another object or overturn

36
Q

Physical Damage Coverage Extensions - Transportation Expenses 4 ($ per days / $ max/ waiting period / Cause

A

30 per day / 900 max for temp transportation expenses

Caused by total theft of covered auto

Applies if Comprehensive / Specified is carried

48 hour Waiting period

Rental Reimbursement Coverage Endt

37
Q

Physical Damage Coverage Extensions - Loss of use Expenses 4 (how much per day and max / only applies to…/

A

Applies only to vehicles rented or hired without driver

Only if legally responsible to pay for loss of use under written contract

30 a day / 900 max

Optional Limits - Loss of Use Expenses Endt

38
Q

Physical Damage Coverage - Exclusions (4 and 1 exception)

A

(War, Racing, Wear and Tear, Electronics)

Nuclear hazard, war, military action

Racing, demolition contest, stunting activity

Wear and Tear, freezing, mechanical or electrical breakdown, road damage to tires

Electronic equipment and media
○ Tapes, records, discs etc.
§ Can be added by endt

Exceptions

Electronics permanently installed, removable from something that’s permanently installed, integral part of housing unit, necessary for operation of auto

39
Q

Physical Damage - Limits of Insurance (Most Paid lesser of… / Limit for Electronic equipment . Depreciation / Betterment payments)

A

Most paid is lesser of
○ ACV
○ Cost to repair or replace with like kind and quality

$1k for all electronic equipment if applicable to exception in exclusion

Adjustment for depreciation

No payment for betterment

40
Q

Endorsements that Modify Limit of Physical Damage (4)

A

Replacement Cost Coverage – Private Passenger Types CA 04 41 11 204
○ RC for private passenger in total loss

Audio, Visual and Data Electronic Equipment Coverage Added Limits CA 99 60 10 13
○ Increases the $1k sublimit

Auto Loan/ Lease Gap Coverage
○ Close gap between unpaid amounts due on a lease or loan on a covered auto and the amount paid under BAP physical Damage

Stated Amount Insurance
○ Includes third amount but still pays least of ACV or cost to repair
- Actually lowers coverage

41
Q

Physical Damage Coverage - Deductible (Highest Max Deductible)

A

Per item deductible with max of 5x the highest deductible

42
Q

Business Auto Conditions - Loss Conditions (5)

A

Loss Conditions (5) TADLL tale if you don’t meet these

Appraisal for Physical Damage Loss

Duties in the Event of Accident, Claim, Suit or Loss (don’t NAP on it)
§ Prompt notice
§ Assume no obligation, make no payment, cooperate and send insurer everything
§ Notify police

Legal Action Against Us

Loss Payment - Physical Damage Coverages
§ Insurer has options for payment (3)
□ Pay for, repair, replace damaged or stolen property
□ Return stolen property
□ Take property at agreed or appraised value

Transfer of Rights of Recovery Against Others to Us
§ CO can subrogate at fault party
§ Do nothing after accident to impair these rights
§ Endt
□ Waiver of Transfer of Rights of Recovery Against others to us
- Auto Waiver

43
Q

Business Auto Conditions - General Conditions (8 but only 2 expanded on)

A

Bankruptcy

Concealment, Misrepresentation or Fraud
§ If insured committing fraud, no coverage
§ Any misrepresentation or conealment

Liberalization

No Benefit to Bailee - Physical Damage Coverage

Other Insurance
§ Primary / Excess Coverage
□ Covered owned auto - primary coverage
□ Covered non-owned auto - excess coverage
□ Covered trailer
® Excess if connected to non-owned
® Primary if connected to owned
§ Primary coverage provided for hired auto physical damage (unless with a driver)

Premium Audit

Policy Period, Coverage Territory

Two or More Coverage Forms or Policies Issued by Us

44
Q

Auto Medical Payment Coverage - What’s Covered (2 coverages / To who? 2/ How long expenses paid? / caused by?)

A

Coverage (Medical or funeral to insured within 3 years by accident)
○ Pays reasonable expenses for medical and funeral
○ To or for an insured
○ Expenses within 3 years
- Caused by accident

45
Q

Auto Medical Payment Coverage - Who is an insured (3)

A

(Fam if individual, any auto, temp autos)

NI when occupying any auto or struck by auto

Includes family if NI is individual

Anyone occupying covered auto or temp sub auto

46
Q

Auto Medical Payment Coverage - Exclusions (8)

A

BUF RAW RV

BI to employee, except non-covered domestic workers

Using without permission

family regular use autos (other than covered auto)

Regular use autos that’s not covered(other than covered autos

Auto business, except NI biz

War

Racing

Vehicle as premise

47
Q

State Specific No Fault Coverage / Personal Injury Protection - What it covers (4)

A

(Medical, funeral, wage, replacement)

Necessary medical expenses

Wage or other income loss benefits

Funeral Expenses

Replacement service expenses

48
Q

Uninsured and Underinsured Motorists - Overview (Purpose 1 / Why Comm Clients Buy 4 / Why they don’t buy 2)

A

Purpose
○ Protection for yourself against negligent party without insurance

Why commercial clients buy? (4)
○ Mandatory in some states
○ Coverage gap fill
○ Non-employees in cars exposure
○ PD available in some states

Why commercial Clients don’t purchase
○ Cost of coverage
- Workers comp covers most of employee claims

49
Q

Underinsured Motorists Definition

A

Majority of states define within the uninsured motorists definition

Policy below limits insured legally entitled to recover

50
Q

Uninsured Motorists Definition

A

No policy providing least amounts required by law

51
Q

UM/UIM Coverage (Insuring agreement 3 / Whos is insured 4/ Exclusions 6)

A

Insuring agreement
○ Pays sum insured legally entitled to recoer
○ Address type of damages paid
○ Most states do compensatory damage, not punitive

Who is an insured
○ NI
○ Individual NI family members
○ Anyone in covered auto
○ Anyone entitled to coverage because of BI to insureds

Exclusions
- Claim settled without insurer consent
- Anyone using covered auto without permission
- WC covers claim instead
- Pain and suffering potentially collected under UM
- BI from owned-but-not-covered auto
- Damage to property in covered auto

CIC - Casualty (4 decks)

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