Business Auto Flashcards
3 Types of Auto Coverages
- Business Auto Coverage form
- Motor Carrier Coverage
- Auto Dealers Coverage Form
2 Coverages on BAP
Liability from ownership, maintenance or use of autos
Physical damage for loss to certain covered autos
Auto Decs Item 1 (5)
○ NI
○ Policy period
○ Form of business
○ Premium
○ Endorsements
Auto Decs Item 2 (3)
○ Coverages
○ Autos
- Limits
Mobile Equipment definition (what’s not mobile equipment 5)
§ Snow removal
§ Road maintenance, but not construction or resurfacing
§ Street cleaening
§ Cherry pickers or similar devices
Air compressors, pumps and generators
Covered Autos Designation Symbols (10)
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
Symbol 10 (2)
Customize coverage
Negotiated description to meet need of NI
Newly Acquired Autos (which symbols auto include it 7 / Symbol 7 when it applies 3)
- 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
Covered Autos - Certain Trailers 1 , Mobile Equipment 1, and Temp Sub Autos (3)
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
Covered Autos Liability - Who is an Insured (2 and second one has 5 exceptions)
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
Endorsements that Modify Insured Status (2 - First has 4, second has 3)
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
Employees as Insureds Endt 2
- Insured status to employee who use their own personal autos to conduct the NI’s business
- Liability provided on an excess basis
Non-ownership Liability Coverage for Volunteers Endt 2
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
Employee Hired Autos Endt 2
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
Volunteer Hired Autos Endt 2
Rented under volunteers name and used to help NI business
Considered owned auto by NI
Lessor - AI and LP Endt 1
Leasing company requiring they are listed as LP and AI in policy
Employee as Lessor Endt 1
Leasing company requiring they are listed as LP and AI in policy
Employee as Lessor endt 1
Provide isnured status to employee who leases their auto to NI
Partners or members as insureds endt 1
Adding members or Partners as AI for covered autos
Hired Autos Specified as Covered Auto You Own endt 2
Insured status to owner of vehicle leased to NI as an owned auto.
On a primary basis but only for vehicle on the schedule
Designated Insured for Covered Autos Liability Coverage endt 1
For person or organization requiring they have AI status listed on policy
Covered Autos Liability Coverage – Insuring Agreement (3 promises / Supp payments 3 / Out of state coverage extensions 3)
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
Covered Auto Liability Exclusions (12)
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
Auto Exclusion - Expected Or Intended Injury (Difference between GL)
No exception for self defense
Auto Exclusion - Contractual (Exceptions 2 / Insured Contract definition - Difference from GL, Includes these agreements, doesn’t include 2 ….)
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
Auto Exclusion - Employee Indemnification and EL (2 exclusions / 2 givebacks)
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
Auto Exclusion - Care, Custody Or Control (Exception 1 / 6 endts)
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
Auto Exclusion - Handling of Property (2 Exceptions)
BI or PD from handling of property
-Before being moved to load onto auto or after has been unloaded.
Auto Exclusion - Movement Of Property By Mechanical Device (2 Exceptions)
Exceptions
Movement by hand truck
Movement of property by mechanical devise attached to covered auto
Auto Exclusion - Operations (definition and one exclusion with 1 exception)
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
Auto Exclusion - Pollution (Definition / 4 Exclusions / 2 Exceptions)
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)
Auto Exclusion - Racing (2 Exclusions)
Excludes track maintenance vehicles and anything associated with racing
Excludes preparation for racing
Physical Damage - Loss Definition
Direct and accidental loss or damage
Comprehensive Definition
Any cause except collision with another object or overturn
Collision Definition
With another object or overturn
Physical Damage Coverage Extensions - Transportation Expenses 4 ($ per days / $ max/ waiting period / Cause
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
Physical Damage Coverage Extensions - Loss of use Expenses 4 (how much per day and max / only applies to…/
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
Physical Damage Coverage - Exclusions (4 and 1 exception)
(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
Physical Damage - Limits of Insurance (Most Paid lesser of… / Limit for Electronic equipment . Depreciation / Betterment payments)
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
Endorsements that Modify Limit of Physical Damage (4)
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
Physical Damage Coverage - Deductible (Highest Max Deductible)
Per item deductible with max of 5x the highest deductible
Business Auto Conditions - Loss Conditions (5)
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
Business Auto Conditions - General Conditions (8 but only 2 expanded on)
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
Auto Medical Payment Coverage - What’s Covered (2 coverages / To who? 2/ How long expenses paid? / caused by?)
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
Auto Medical Payment Coverage - Who is an insured (3)
(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
Auto Medical Payment Coverage - Exclusions (8)
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
State Specific No Fault Coverage / Personal Injury Protection - What it covers (4)
(Medical, funeral, wage, replacement)
Necessary medical expenses
Wage or other income loss benefits
Funeral Expenses
Replacement service expenses
Uninsured and Underinsured Motorists - Overview (Purpose 1 / Why Comm Clients Buy 4 / Why they don’t buy 2)
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
Underinsured Motorists Definition
Majority of states define within the uninsured motorists definition
Policy below limits insured legally entitled to recover
Uninsured Motorists Definition
No policy providing least amounts required by law
UM/UIM Coverage (Insuring agreement 3 / Whos is insured 4/ Exclusions 6)
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
