Business Auto Coverage for Unscheduled Trailer

This question pertains to liability coverage afforded by the business auto policy. The insured was driving a covered auto (symbol 7) and was pulling a trailer that weighed over 6,500 pounds; the trailer is owned by the named insured, but is not scheduled on the policy. As the insured was taking a curve at excessive speed, he lost control of the vehicle and struck a guard rail. The impact with the guard rail caused the trailer to come loose and it then struck a vehicle coming from the opposite direction. Does the insured have liability coverage for this property damage claim?

Texas Subscriber

Liability coverage under the terms of the BAP is for a covered auto. The trailer was not a covered auto since it was not specifically described in the declarations as required by the use of symbol 7. This symbol does provide liability coverage for trailers not owned by the named insured while attached to a power unit listed in the declarations, but owned trailer have to be specifically described for coverage to apply. Even the automatic liability coverage afforded to trailers will not help the insured in this instance since that coverage is for trailers with a load capacity of 2,000 pounds or less.

Now, there may be a question as to whether the trailer alone was the cause of the loss. You say that the insured was driving at excessive speed using the covered auto. A case could be made that the use of the covered auto was the actual cause of the accident due to the speeding. If that is the case, then the BAP would apply to the claim. But, this is a matter for an attorney who is familiar with the law in your area to handle.

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