chapter ten - commercial auto coverage

Question 1

What Form …
Used to cover owned, leased, hired, rented, or borrowed private passenger autos, trucks, trailers, and semi-trailers that are owned or used by the insured.

Answer 1

Business Auto Coverage Form

Question 2

The Business Auto Coverage Form covers all of the following, except:

Owned private passenger autos

Automatic coverage for physical damage to trailers

Automobiles owned by employees used for business purposes

Mobile equipment registered to drive on public roads

Answer 2

Automatic coverage for physical damage to trailers.

Owned trailers used by businesses may be covered for physical damage coverage but it is not automatic coverage

Question 3

Which of the following is not a Symbol under Section I – Covered Autos?

Specifically described on Declarations

Dealers auto liability coverage

Owned Autos Subject to No Fault

Any auto

Answer 3

Dealers auto liability coverage.

Symbol categories also describe only non-owned autos, hired autos, and owned private passenger autos only

Question 4

Which of the following is NOT an “insured” under the Business Auto Coverage form?

Named insured

Fellow employee

Person using a borrowed auto with permission of the insured

Person liable for the conduct of the insured

Answer 4

Fellow employee.

Under Section II - Lability coverage bodily injury liability coverage does not apply to a fellow employee

Question 5

What is the maximum the insurer will pay for a covered transportation expenses claim?

$400

$200

$600

$800

Answer 5

$600.

(Transportation expenses are paid up to $20 per day and a maximum of $600 for temporary transportation expenses for the total theft of a covered vehicle)

Question 6

General Conditions in the business auto policy apply to which of the following?

Transfer of rights

Legal action against the insured

Bankruptcy

Appraisal

Answer 6

Bankruptcy.

(the other choices are loss conditions, and also included as General Conditions are concealment, misrepresentation, or fraud, liberalization, other insurance, premium audit, policy period, and territory,)

Question 7

A vehicle the insured does not own, rent, lease, or borrow and is used in connection with the insured’s business.

Answer 7

Non-owned Auto

Question 8

A land motor vehicle, trailer, or semi-trailer, designed for travel on public roads or any other vehicle subject to a compulsory or financial responsibility law or motor vehicle insurance law in the jurisdiction where the vehicle is licensed or principally garaged.

Answer 8

Auto

Question 9

Vehicle the insured leases, hires, rents, or borrows and is used in connection with the insured’s business.

Answer 9

Hired Auto

Question 10

Continuous or repeated exposure to the same conditions that results in ‘bodily injury’ or ‘property damage’

Answer 10

Accident

Question 11

Which of the following covers the insured’s legal obligations for damage to a customer’s car?

Garagekeepers

General Liability

Physical damage

Auto Liability

Answer 11

Garagekeepers.

Garagekeepers coverage is the Garage Coverage form to eliminate possible coverage gaps

Question 12

Which of the following is covered under Section III – Garagekeepers on the Garage Coverage form?

Garage Operations

Vehicles and equipment owned by others in the care of the insured

Uninsured Motorists

Completed Operations

Answer 12

Vehicles and equipment owned by others in the care of the insured.

(Garagekeepers Coverage provides Comprehensive, Specified Causes of Loss, and Collision coverage for the vehicle and its equipment while in the care, and control of the insured)

Question 13

Which of the following is NOT one of the five symbol designations on the Business Auto Physical Damage Coverage form?

Owned autos only

Hired autos only

Autos left for service

Specifically described autos

Answer 13

Autos left for service

The other two symbols are owned private passenger autos only and owned autos other than private passenger autos only

Question 14

All of the following statements regarding a common carrier covered under the Truckers and Motor Carrier Coverage form are correct, except:

A common carrier must use the Trucker Coverage Form

A common carrier can also use the Motor Carrier Coverage Form

A trucker that transports goods belonging to several customers at the same time

A business individual that carries the general public from one place to another for a fee

Answer 14

A common carrier must use the Trucker Coverage Form

A common carrier can use either the Trucker Coverage Form or the Motor Carrier Coverage Form

Question 15

What coverage under the Motor Carrier Coverage form provides physical damage coverage for non-owned trailers and equipment in the event of an at-fault accident?

Trailer Interchange Coverage

Other Insurance Clause

Commercial Truckers Coverage

Truckers Physical Damage Coverage

Answer 15

Trailer Interchange Coverage

(This coverage is included because truckers and motor carriers may hire independent operators to drive the owned vehicle)

Question 16

Covers business exposures of motor carriers for hire who transport the goods of others.

Answer 16

Truckers Coverage Form

Question 17

A business, individual, or organization that, for a fee, carries persons or property that are or belong only to certain customers, from one place to another.

Answer 17

Contract Carrier.

Question 18

A business, individual, or organization that, for a fee, carries persons or property that are or belong to the general public from one place to another.

Answer 18

Common carrier.

Question 19

Covers business exposures due to the transportation of goods owned by others for hire and the transportation of their own property.

Answer 19

Motor Carrier Coverage Form

Question 20

The passage of the Motor Carrier Act of 1980 resulted in all of the following, except:

Mandatory minimum liability limits

Deregulation of the trucking industry

Prohibition of rating bureaus to develop the rates

Increase in truckers wages

Answer 20

Increase in trucker wages.

(As a result of this Act, the number of motor carriers doing business increased and the consumer costs associated with trucking decreased, thus reducing trucker wages.)

Question 21

Which of the following is true about the Individual Named Insured endorsement?

Protects the named insured who does not own a car

Applies to all resident family members

Adds business coverage to a personal private passenger auto

Coverage is provided only to those individuals listed on a schedule

Answer 21

Applies to all resident family members.

(The Individual Named Insured endorsement adds all resident family members to the Business Auto Coverage form in order to allow family member permission to drive business autos)

Question 22

Which coverage is not available under the Garage Coverage Form?

Physical damage coverage

Advertising liability

Product liability

Garagekeepers coverage

Answer 22

Advertising liability.

Other provided coverages include premises liability and auto liability

Question 23

When an employee is injured in an auto accident while on company business, he/she would be covered under:

Company group health insurance

Workers’ Compensation Insurance

Garagekeepers Form

Garage Liability Form

Answer 23

Workers’ Compensation Insurance.

Workers’ Compensation is the exclusive remedy for on-the-job injuries

Question 24

All of the following are loss conditions of the BAP, except:

Examination of Your Books and Records

Duties in the event of an accident

Transfer of rights of recovery

Legal action against the insurer

Answer 24

Examination of your Books and Records

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

Question 25

The Garagekeepers Coverage of the Garage Coverage Form covers the liability of:

Product liability exposures

Physical damage to a customer’s car that is in the care and custody of an insured

Owned vehicles that are used in the business

Damage to autos held for sale

Answer 25

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.)

Question 26

Which of the following is not a specified loss under the garagekeepers section of the Garage Coverage Forms?

Windstorm

Vandalism

Fire

Theft

Answer 26

Windstorm.

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

Question 27

Which coverage form covers business exposures of motor carriers for hire who transport the goods of others?

Motor Carrier

Contract Carrier

Symbol 30 under the Business Auto

Truckers

Answer 27

Truckers.

The Truckers Coverage form covers the business exposures of motor carriers for hire who transport the goods of others

Question 28

Which coverage is not available under the Garage Coverage Form?

Answer 28

Advertising Liability.

Advertising liability would be available under a CGL policy

Question 29

Section II of the Garage Coverage Form does not cover:

Damage to the customer’s car in the insured’s care

Premise and operations liability

Completed operations liability

Products liability

Answer 29

Damage to the customer’s car in the insured’s care.

(Section II (Liability) Coverage does not cover vehicles in the insured’s care, custody or control. Section III (Garagekeepers Coverage) provides this coverage)

Question 30

Mobile equipment does not include which of the following?

Motor vehicles designed for road use

Vehicles that travel on crawler treads

Resurfacing equipment mounted on a vehicle

Farm machinery designed for off-road use

Answer 30

Motor vehicles designed for road use.

Mobile equipment does not include vehicles designed for road use

Question 31

Which of the following is not covered under Comprehensive Coverage under the Business Auto Coverage Form?

Collision

Theft

Fire and Lightning

Glass Breakage

Answer 31

Collision.

(Comprehensive Coverage under the Business Auto Coverage Form is an open perils coverage that covers damage from perils not excluded. Collisions are excluded)

Question 32

The endorsement providing evidence of financial responsibility for motor carriers is know as:

Form MCS-80

Form MCS-90

Form MCS-900

Form MCS-60

Answer 32

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 requirement of the Department of Transportation.)

Question 33

All of the following must be listed on Form MCS-90, except:

The policy number and policy dates

The limits of liability provided by the policy

The policy premium amount

The names of the motor carrier and the insurance company

Answer 33

The policy premium amount.

(Form MCS-90 must be carried in the cabin of the vehicle and must show: The names of the motor carrier and the insurance company; the policy number and policy dates; whether the insurance providing coverage is primary or excess; and the limits of liability provided by the policy.)

Question 34

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:

$700 less the $250 mandatory deductible

$700 only if the employee is proven negligent

Nothing

$700 less the $100 mandatory deductible

Answer 34

$700 less the $100 mandatory dedcutible.

(A $100 deductible applies to all losses resulting from the property damage to an auto as a result of work performed on that auto by the insured)

Question 35

Which type of Commercial Auto policy would be best suited for a parking garage business?

Truckers Coverage Form

Motor Carrier Coverage Form

Garage Coverage Form

Business Auto Coverage Form

Answer 35

Garage Coverage Form.

(The Garage Coverage Form is designed to provide coverage for business engaged in the sale, service, parking, or storage of automobiles. Eligible businesses include automobile vehicle dealerships, sales agencies, repair shops, service stations, storage garages, and public parking places)

Question 36

The Business Auto Coverage Form is intended for which of the following businesses?

Owned, leased, hired or borrowed private passenger autos only

Owned or hired trucks, trailers and semi-trailers only

Owned, leased, or hired trucks, trailers and semi-trailers only

Owned, leased, hired or borrowed private passenger autos, trucks, trailers and semi-trailers

Answer 36

Owned, leased, hired or borrowed private passenger autos, trucks, trailers and semi-trailers.

(The Business Auto Coverage Form is used for insuring owned, leased, hired, or borrowed private passenger autos, trucks, trailers, and semi-trailers used in the business of the insured).