This coverage part may be added to the CPP to protect an insured against BI or PD to others arising out of the operation, maintenance, or use of an auto used for business purposes.
This coverage part is similar in nature and scope to the PAP, except that the exposure is different. It provides BI and PD coverage in addition to physical damage protection for the covered business auto. Coverage is provided for three classes of autos, including owned, hired, and non-owned autos.
Any type of covered auto used for business purposes should be covered by this coverage part. There are several coverage forms that can be purchased, including:
The standard form for insuring commercial automobiles is this form. It may be added to the commercial auto coverage part and provides liability, physical damage coverage, medical payments, and uninsured motorist coverage. This form possesses five coverage sections, including:
Covered Autos. Three classes of autos are insurable, including owned, hired, and non-owned autos. Hired autos include those that are leased, hired, rented, or borrowed, excluding autos that are owned by employees. Non-owned autos are those that are leased, hired, rented, or borrowed from an employee.
Liability coverage covers the legal liability of the insured, defense costs, and supplementary payments.
Pollution damage will only be covered if pollution is caused by an accident where the damaged gas tank leaked gas or other pollutants necessary for the normal operation of a covered auto.
Physical damage coverage section may be written to cover the following:
The Conditions section of the policy includes the conditions that the insured and the insurer must abide by. Common conditions listed are the duties of the insured following a loss, subrogation, liberalization, policy periods, and coverage territory.
This section of the Business Auto Coverage Form gives the full meaning of terms included within the policy.
An exclusion section is also included. Most of these exclusions are similar to those appearing in other liability policies. However, pollution liability is covered.
This form is available for businesses who wish to be covered for liability arising out of garage operations. It may be purchased by a garage, auto sales firms, service stations, repair shops, public parking lots and storage garages. Garage coverage does not cover property damage to autos or other property of customers in the care, custody or control of the named insured. This is provided by garage keepers Liability.
Garage keepers Liability is a form of Bailee liability which provides coverage for damage to the autos of customers when they are in the custody of the named insured. The insured may choose from among several perils insured against including collision, comprehensive or other specified perils.
Truckers may insure a single vehicle, several vehicles, or a fleet. The truckers’ coverage form may be added to the commercial auto coverage part. Premiums charged are generally based on class rates. This form will protect a trucker who contracts with another party in order to haul goods or property.
Some truckers may use their own tractor or cab to haul the property of others in the customer’s trailer. In this situation, the trailer owner provides liability insurance for himself and the trucker.
If the tractor or trucker’s cab is not being used to pull another trucker’s trailer, it requires its own coverage in the form of a bobtail endorsement. “Non-trucking” use of the tractor or cab without a trailer is called bobtailing.
If a tractor or cab pulls an empty trailer, this is known as deadheading. The actual endorsement that is added to provide coverage for bobtailing or deadheading is called “Truckers Insurance for Non-Trucking Use.”
An organization that transports goods or passengers for a fee is known as a carrier. A common carrier is one that makes transportation available to the public and has liability for bodily injury to others. The 1980 Motor Carrier Act requires that truckers and carriers file proof of liability insurance in order to operate (MCS90 endorsement). The financial responsibility limits required according to this Act were as follows:
Several endorsements are available to be added to commercial auto coverage, including:
Commercial auto insurance can be added to a CPP to protect against BI or PD to others due to the use of an auto for business purposes. It offers BI and PD coverage along with physical damage protection for owned, hired, and non-owned autos.
The Business Auto Coverage Form includes sections for covered autos, liability coverage, physical damage coverage, conditions, and definitions. It covers various perils like collision, comprehensive, and specified causes of loss.
The Garage Coverage Form is for businesses with garage operations, while the Garage keepers’ Liability covers damage to autos of customers in the insured’s custody. Truckers’ Coverage Form protects truckers hauling goods for others and includes coverage for situations like bobtailing or deadheading.
Regulation of commercial carriers like truckers and carriers mandates proof of liability insurance as per the 1980 Motor Carrier Act, with varying coverage limits depending on the type of transportation.
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