Chapter 7: Commercial Auto Policy

Question 1

Business Auto Coverage (BAC)

Answer 1

liability and physical damage for owned, non-owned, hired auto used in insured’s business operations

Question 2

Auto Dealers Coverage

Answer 2

auto dealers better protected instead of a BAC Form
*tailored for auto dealers risks

Question 3

Motor Carrier Coverage

Answer 3

Goods shipped in owners’ vehicles, contract carriers, common carriers
*insure the exposures of contract carriers and common carriers

Question 4

Symbols 1-19

Answer 4

1. Any autos used for liability coverage only
2. Owned autos only
3. owned private passenger autos only
4. owned autos other than private passenger autos
5. owned autos subject to no fault
6. owned autos subject to compulsory uninsured motorists law
7. specifically described auto only
8. hired autos only
9. non-owned autos only
10. mobile equipment subject to compulsory or financial responsibility or other motor vehicle insurance law only

Question 5

Who is insured under BAP

Answer 5

the named insured, anyone using auto with permission of the named insured, those held vicariously liable

Question 6

Who is not insured under BAP

Answer 6

Owner of, for hire or borrowed covered auto
employee if covered auto owned by employee or member of household
someone using covered auto while working in auto type business
restriction for loading or unloading
Partner or member if covered auto owned in partner or member of household

Question 7

Endorsement: Drive Other Car Coverage- Broadened Coverage for Named Insured

Answer 7

employees, partners, and officers who are furnished company autos and do not have their own Personal Auto Policy

Question 8

Endorsement: Lessor- Additional Insured & Loss Payee

Answer 8

adds a loss payable clause in favor for the lessor named

Question 9

Endorsement: Individual Named Insured

Answer 9

vehicle titled to person w/o Personal Auto Policy (PAP) and they want to have Business Auto Policy (BAP) cover specific vehicle

Question 10

Supplementary Payments

Answer 10

• costs incurred by insured at insurance companies request
• $2,000 for cost of bail bonds
• cost of release attachment bonds
• reasonable expenses including up to $250 per day to assist with claim
• pre judgement and post judgement interest

Question 11

Motor Carrier Act of 1980

Answer 11

requires bodily injury, property damage and environmental restoration claims that arise form use/operation of an auto

Question 12

MCS-80 Endorsement

Answer 12

absolute liability; $10,000 per day penalty for knowing and not complying
Insured is required to pay back any payment for environmental restoration

Question 13

Limits of Transportation Expenses

Answer 13

$750,000 for non-hazardous property
$1mil for oil/hazardous waste
$5mil for hazardous substances
$5mil for explosives and poisonous gasses