chapter ten - commercial auto coverage Flashcards
The deregulation of the trucking industry was accomplished through which 1980 regulation?
Motor Carrier Act
Trailer Interchange Act
Motor Carrier Public Liability Act
Trucking Reform Act
Motor Carrier Act.
This regulation requires certain vehicles carry minimum liability limits ranging from $750,000 to $5,000,000, depending on the type of merchandise transported
Section II (Liability) of the Garage Coverage Form covers which of the following?
Injuries covered by Workers’ Compensation
Injuries to an employee that are caused by a fellow employee
Property in the care and custody of the insured
Property damage for which the insured is legally responsible
Property damage for which the insured is legally responsible.
Section II (Liability) of the Garage Coverage Form covers which of the following?
Injuries covered by Workers’ Compensation
Injuries to an employee that are caused by a fellow employee
Property in the care and custody of the insured
Property damage for which the insured is legally responsible
Property damage for which the insured is legally responsible.
How is lost or damaged property valued under the BAP?
Lesser of the ACV or the cost to repair or replace
Greater of the cost to repair and the replacement cost
Lesser of the replacement cost and the ACV
Greater of the ACV or the cost to repair or replace with like kind
Lesser of the ACV or the cost to repair or replace.
The most the insurer will pay for damaged or stolen property in any one accident is the lesser of the ACV or the cost of repairing or replacing with property of like kind and quality.
Which of the following is designed for a firm that transports goods of others, rather than its own goods?
Truckers Coverage Form
Motor Carrier Coverage Form
Business Auto Form
Garage Form
Truckers Coverage Form
A Truckers Coverage Form is designed for common and contract carriers hauling the goods of others.
Section II of the Garage Coverage Form does not cover:
Premise and operations liability
Products liability
Damage to the customer’s car in the insured’s care
Completed operations 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.
Specified Causes of Loss under Physical Damage Coverage of the Business Auto Coverage Form includes all of the following, except:
Windstorm, hail or earthquake
Theft
Glass breakage
Flood
Glass breakage.
Specified Perils Coverage is similar to Comprehensive (or Other than Collision) Coverage, but it is a specified perils form and glass breakage is not specified as an insured peril.
The Garage Liability section of the Garage Coverage Form covers which of the following?
Property damage for which the insured is legally responsible
Injuries covered by Workers’ Compensation
Property in the care and custody of the insured
Product recall
Property damage for which the insured is legally responsible
Section II provides bodily injury and property damage liability coverage for losses resulting from garage operations. In addition, the form includes coverage for Premises and Operations Liability, Products Liability, and Completed Operations Liability. The section does not cover property in the care and custody of the insured, injuries covered by Workers’ Compensation, and liability arising from pollution or product recall.
What is the name for insurance covering the amount an insured is legally obligated to pay for loss to a customer’s vehicle in the insured’s care?
Business auto coverage
Garage coverage form
Garagekeepers coverage
Garage product liability
Garagekeepers coverage
Garagekeepers coverage pays for loss or damage to a customer’s vehicle and equipment while in the insured’s care for servicing, repair, parking, or storing.
Which of the following autos is covered under Symbol 9 of the Business Auto Coverage Form?
An auto borrowed by the insured
An auto owned by the insured’s employee while used in the insured’s business
An auto leased or hired by the insured
Any auto not used in the insured’s business
An auto owned by the insured’s employee while used in the insured’s business.
Non-owned Autos Only Coverage, Symbol 9, provides coverage for only those autos the insured does not own, lease, hire, rent or borrow, which are used in connection with the insured’s business. This includes autos owned by the employees or members of their household.
Which vehicle would not be eligible for a Business Auto Coverage Form?
A trailer that is used to carry a backhoe
A private passenger auto that is used in the business
A forklift used in the business
A van that is used by a delivery firm
A forklift used in the business.
Being mobile equipment, a forklift is not eligible for auto coverage, other than by endorsement.
Choose the false statement regarding commercial auto coverage.
Section II of the Garage Coverage Form does not provide physical damage coverage to a customer’s car
Section IV of the Garage Coverage Form provides coverage for the insured’s owned autos
Section II of the Garage Coverage Form - does not provide completed operations coverage
The Business Auto Coverage Form will cover liability arising from mobile equipment being carried or towed
Section II of the Garage Form - does not provide completed operations coverage
Section II of the Garage Coverage Form provides bodily injury and property damage liability coverage for losses resulting from garage operations. In addition, the form includes coverage for Premises and Operations Liability, Products Liability, and Completed Operations Liability.
The Business Auto Coverage Form is intended for which of the following businesses?
Owned, leased, hired or borrowed private passenger autos only
Owned, leased, or hired trucks, trailers and semi-trailers only
Owned 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.
Which type of Commercial Auto policy would be best suited for a parking garage business?
Garage Coverage Form
Truckers Coverage Form
Business Auto Coverage Form
Motor Carrier Coverage Form
Garage Coverage Form
The Garage Coverage Form is designed to provide coverage for businesses 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.
Which of the business auto coverage forms provides insurance for a contract carrier that transports its own goods in addition to the goods owned by others?
Garage Coverage Form
Motor Carrier Coverage Form
Truckers Coverage Form
Business Auto Coverage Form
Motor Carrier Coverage Form
The Motor Carrier Coverage Form provides coverage for contract carriers for the transportation of goods, for hire, that are owned by others and transporting their own property.
All of the following regarding the Garage Coverage Form are correct, except:
It provides automobile liability, physical damage, and general liability insurance for auto businesses
Coverage is typically written using a blanket limit of insurance
It provides physical damage coverage for covered autos the named insured owns, hires, rents, leases, or borrows
It provides coverage for product recall
It provides coverage for product recall.
The Garage policy does not cover property in the care and custody of the insured, injuries covered by Workers’ Compensation, and liability arising from pollution or product recall.
Flood is a specified cause of loss under which section of the Garage Coverage Form?
Section IV
Section I
Section II
Section III
Section IV
The Section IV specified perils are the same as those found in the BAP, which includes damage for flood The Section III specified perils are more restrictive, including only fire, lightning, explosion, theft, mischief, and vandalism.
The limit of insurance that the insurer will pay for a physical damage loss is the:
Actual Cash Value
Lesser of the ACV or the cost to repair or replace with like kind and quality
Greater of the ACV or the cost to repair or replace with like kind and quality
Replacement cost
Lesser of the ACV or the cost to repair or replace with like kind and quality.
The most the insurer will pay for damaged or stolen property in any one accident is the lesser of the ACV or the cost of repairing or replacing with property of like kind and quality.
Which of the following is not covered under Comprehensive Coverage under the Business Auto Coverage Form?
Theft
Collision
Glass Breakage
Fire and Lightning
Collision.
Comprehensive Coverage under the Business Auto Coverage Form is an open perils coverage that covers damage from perils not excluded. Collisions are excluded.
All of the following are true of the Business Auto Coverage Form, except:
Medical payments coverage may be added by endorsement
Coverage is primary on owned autos and excess on non-owned autos
Uninsured Motorist Coverage is included in Section II
Coverage may be written on owned private passenger autos
Uninsured Motorist Coverage is included in Section II
Section II of the BAP provides liability coverage. Uninsured Motorist coverage is provided by optional endorsement.
Which source of liability would a trucker be liable for under a Motor Carrier Coverage Form?
Cargo damage from overturn
Acts of God
Faulty packing by a Shipper
Exercise of Public Authority
Cargo damage from overturn.
The Motor Carrier Coverage Form provides Trailer Interchange Coverage, which protects against physical damage such as comprehensive and/or collision coverage.
Garagekeepers Coverage will cover which of the following claims?
Damage to the products for sale
Physical damage to a customer’s car that is in the care and custody of an insured
Product liability exposures
An owned vehicle used in the business, that is damaged by a hail storm
Physical damage to a customer’s car that is in the care and custody of an insured.
Garagekeepers Coverage pays for damage to customer’s cars in the care and custody of the insured.
All of the following are general conditions of the BAP, except:
Premium audit
Concealment, misrepresentation, or fraud
Duties in the event of an accident
No benefit to bailee for physical damage
Duties in the event of an accident.
Duties in the event of an accident is a loss condition under the BAP, not a general condition.
All of the following are true of the Business Auto Coverage Form, except:
It covers liability from mobile equipment while being towed
It does not include contractual liability coverage
It provides no-fault coverage in states that require it
It covers injuries to employees
It covers injuries to employees
Injuries to employees would be covered under Workers’ Compensation
Which section of the BAP provides auto medical payments coverage?
Section III
This coverage is available by endorsement only
Section II
Section I
This coverage is available by endorsement only
Commercial auto policies do not automatically provide medical payments coverage, which must be added by endorsement.
Which of the following is not covered under Section II of the Garage Coverage Form?
Products liability
Damage to the customer’s car in the insured’s care
Premise and operations liability
Completed operations liability
Damage to the customer’s car in the insured’s care.
Which of the following autos is covered under Symbol 9 of the Business Auto Coverage Form?
An auto borrowed by the insured
An auto leased or hired by the insured
Any auto not used in the insured’s business
An auto owned by the insured’s employee while used in the insured’s business
An auto owned by the insured’s employee while used in the insured’s business.
Which of the following is true concerning the Limit of Liability under the Business Auto Coverage Form?
The Limit of Liability is determined by the number of vehicles scheduled on the policy
The Limit of Liability is the most the policy will pay for any single accident
The Limit of Liability is determined by the number of the insured’s vehicles involved in the accident
The Limit of Liability is the amount available for each claim made under the policy
The Limit of Liability is the most the policy will pay for any single accident.
The Limit of Liability is the most the policy will pay resulting from any one accident regardless of the number of autos, insureds, premiums paid, claims made, or vehicles involved in the accident.
Which of the following would not be a covered auto under the Business Auto Policy Mobile Equipment endorsement?
Forklift
Truck operated on public roads
Truck with a mounted power crane
Bulldozer
Truck operated on public roads.
A truck licensed and registered for use on public roads would be covered under the standard BAP, without need for an endorsement.
Which would be covered under the Business Auto Coverage Form?
A vehicle repaired for others
A borrowed truck used in the insured’s business
Dealer inventory
A trailer stored for another person
A borrowed truck used in the insured’s business.
The BAP covers owned, leased, hired, rented, or borrowed cars, trucks, trailers, and semi-trailers owned and used by a business.
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.
What symbol….
Any auto, if it is used in the insured business, regardless of ownership
Symbol 1
What Symbol…
Owned Autos Only, whether or not specifically listed on the policy
Symbol 2
What Symbol…
Owned Private Passenger Autos Only; a business may wish to provide insurance differently for its cars than for its dump trucks or vehicles used for delivery
Symbol 3
What Symbol…
Owned Autos Other Than Private Passenger Autos Only
Symbol 4
What Symbol…
Owned Autos Subject to No Fault Laws
Symbol 5
What Symbol…
Owned Autos Subject to a Compulsory Uninsured Motorist Law
Symbol 6
What Symbol…
Specifically described vehicles listed on the declarations page
Symbol 7
What Symbol…
Hired Autos Only, which are those the insured leases, hires, rents or borrows, except any auto the insured leases, hires, rents, or borrows from an employee. These vehicles may not be owned by the insured.
Symbol 8
What Symbol…
Non-owned Autos Only, which are those the insured does not own, lease, hire, rent or borrow, and are used in connection with the insured’s business. This includes autos owned by an employee of the insured or a member of the employee’s household.
Symbol 9
What Symbol…
Mobile Equipment Subject to Compulsory or Financial Responsibility or Other Vehicle Insurance Law, which triggers protection for autos that are otherwise described as “mobile equipment”, but are required to be licensed and registered to be operated on public roadways. This symbol is necessary since mobile equipment is excluded from the definition of “auto” under the business auto policy.
Symbol 19
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
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 – Liability 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.
General Conditions in the business auto policy apply to which of the following?
Transfer of rights
Legal action against the insured
Bankruptcy
Appraisal
Bankruptcy.
Any type of land vehicle, including any attached machinery or equipment that isn’t required to be registered to operate on public road.
Mobile equipment.
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
Garagekeeprs coverage is the Garage Coverage form to eliminate possible coverage gaps.
What Symbol…
“Autos” left with the insured for service, repair, storage, or safekeeping
Symbol 30
What Symbol…
Dealers “autos” physical damage coverages”
Symbol 31
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 either use the Trucker Coverage Form or the Motor Carrier 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.
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 Names Insured endorsement adds all resident family members to the Business Auto Coverage form in order to allow 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.
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
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 (garagekeepers 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.
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 (Garagekeeprs 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.
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.
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 by the policy.
Which of the following would not be eligible for coverage under the Business Auto Coverage Form?
A private passenger automobile owned by the insured and used in the insured’s business
The insured for an employee’s use of a personal auto in the insured’s business
An employee injured using the employee’s personal auto in insured’s business
A tractor-trailer used in the insured’s business
An employee injured using the employee’s personal auto in insured’s business.
WORKERS COMP
Which Business Auto Symbol provides the broadest coverage?
2
9
1
3
1.
Symbol 1 includes any auto, whether owned or not by the insured if it is used in the insured’s business. The other choices refer only to owned autos only (2 and 3) or non-owned autos only (9)
Under the Motor Carrier Coverage Form, Trailer Interchange Coverage would cover which of the following losses?
Joe’s company is legally liable for bodily injury sustained by an employee
Joe’s company is legally liable for physical damage sustained by a non-owned trailer
Joe’s truck sustains damage in a collision
Joe’s truck causes property damage in a collision
Joe’s company is legally liable for physical damage sustained by a non-owned trailer.
Trailer Interchange coverage is physical damage coverage for non-owned trailers and their equipment if they sustain a loss and the insured is legally responsible for the damage.
Which statement regarding the Medical Payments Coverage of the Business Auto Policy is true?
Coverage is limited to medical expenses incurred in the first year after the accident
Medical Payments Coverage also pays loss of income during disability arising from a covered accident
The BAP does not automatically include Medical Payments Coverage
Medical Payments Coverage is designed to provide medical payments coverage for employees
Choose the false statement about commercial auto coverage.
Specified Peril Coverage pays for damage to an insured vehicle from almost any cause except collision
Garagekeepers Insurance provides coverage for damage to a customer’s car
The Motor Carrier Coverage Form provides coverage for business exposures due to the transportation of goods owned by others for hire and transporting their own property
A Garage Coverage Form will cover legal liability from completed operations
Specified Peril Coverage pays for damage to an insured vehicle from almost any cause except collision
Specified Peril Coverage provides coverage only for certain named perils such as fire.
Physical damage coverage under a Business Auto Coverage Form includes all of the following, except:
Uninsured Motorist Coverage
Specified Causes of Loss
Collision Coverage
Comprehensive Coverage
Uninsured Motorist Coverage
The three types of physical damage coverage under the BAP are collision, comprehensive, and specified perils. Uninsured Motorist is a separate coverage added by endorsement.
