Liability Coverages of the Business Auto Policy

Question 1

Which coverage is available in an unendorsed personal auto policy (PAP) but is available only through an endorsement in a business auto policy (BAP)?

Answer 1

Correct. Unlike the personal auto policy (PAP), the BAP does not cover medical payments and uninsured motorists as standard coverage. However, such coverage is available by endorsement.

Question 2

Subrogation

Answer 2

When the insurer pays a claim to or on behalf of a claimant, it gets that claimant’s right to recover damages from the liable party. This transfer of recovery rights is known as subrogation. The claimant must take all steps necessary to secure and protect these rights for the insurer.

Question 3

In a business auto policy (BAP), how do the comprehensive, specified causes of loss, and collision physical damage coverages differ?

Answer 3

Comprehensive coverage is open perils coverage that pays for damage to a covered auto from any cause except overturn or collision with another object. Specified causes of loss coverage is named perils coverage. Collision coverage pays for loss to a covered auto caused by its collision with another object or the auto’s overturn.