chapter ten - commercial auto coverage Flashcards
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.
Business Auto Coverage Form
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
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
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
Dealers auto liability coverage.
Symbol categories also describe only non-owned autos, hired autos, and owned private passenger autos only
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
Fellow employee.
Under Section II - Lability coverage bodily injury liability coverage does not apply to a fellow employee
What is the maximum the insurer will pay for a covered transportation expenses claim?
$400
$200
$600
$800
$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)
General Conditions in the business auto policy apply to which of the following?
Transfer of rights
Legal action against the insured
Bankruptcy
Appraisal
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,)
A vehicle the insured does not own, rent, lease, or borrow and is used in connection with the insured’s business.
Non-owned Auto
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.
Auto
Vehicle the insured leases, hires, rents, or borrows and is used in connection with the insured’s business.
Hired Auto
Continuous or repeated exposure to the same conditions that results in ‘bodily injury’ or ‘property damage’
Accident
Which of the following covers the insured’s legal obligations for damage to a customer’s car?
Garagekeepers
General Liability
Physical damage
Auto Liability
Garagekeepers.
Garagekeepers coverage is the Garage Coverage form to eliminate possible coverage gaps
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
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)
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
Autos left for service
The other two symbols are owned private passenger autos only and owned autos other than private passenger autos only
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
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
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
Trailer Interchange Coverage
(This coverage is included because truckers and motor carriers may hire independent operators to drive the owned vehicle)
Covers business exposures of motor carriers for hire who transport the goods of others.
Truckers Coverage Form
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.
Contract Carrier.
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.
Common carrier.
Covers business exposures due to the transportation of goods owned by others for hire and the transportation of their own property.
Motor Carrier Coverage Form
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
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.)
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
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)
Which coverage is not available under the Garage Coverage Form?
Physical damage coverage
Advertising liability
Product liability
Garagekeepers coverage
Advertising liability.
Other provided coverages include premises liability and auto liability
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
Workers’ Compensation Insurance.
Workers’ Compensation is the exclusive remedy for on-the-job injuries
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
Examination of your Books and Records
The Examination of Your Books and Records condition is a Common Policy Condition of the CPP
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
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.)
Which of the following is not a specified loss under the garagekeepers section of the Garage Coverage Forms?
Windstorm
Vandalism
Fire
Theft
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)
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
Truckers.
The Truckers Coverage form covers the business exposures of motor carriers for hire who transport the goods of others
Which coverage is not available under the Garage Coverage Form?
Advertising Liability.
Advertising liability would be available under a CGL policy
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
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)
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
Motor vehicles designed for road use.
Mobile equipment does not include vehicles designed for road use
Which of the following is not covered under Comprehensive Coverage under the Business Auto Coverage Form?
Collision
Theft
Fire and Lightning
Glass Breakage
Collision.
(Comprehensive Coverage under the Business Auto Coverage Form is an open perils coverage that covers damage from perils not excluded. Collisions are excluded)
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
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.)
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
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.)
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
$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)
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
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)
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
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).
