Business Auto Policy and Out of State Loss

Our insured has a business auto policy (BAP) with symbols 7, 8, and 9 for covered auto liability. The insured rented a vehicle in Florida, drove it to New Jersey , and caused an accident resulting in property damage to another vehicle. The rental contract the insured signed stipulated that the insured was prohibited from driving the vehicle out of the state of Florida . We are trying to determine whether liability coverage can still be afforded to the insured. What is your opinion?

Florida Subscriber

The liability coverage under the terms of the BAP is for bodily injury and property damage the insured is liable for resulting from the use of a covered auto. Presuming this was a covered auto based on the symbols used, the insured has the liability coverage for this claim. It makes no difference what the contract between the insured and the rental company declares; that is a separate agreement that does not negate the insuring agreement in the BAP. Also, the auto accident occurred in the coverage territory and during the policy period, and there are no exclusions to prevent coverage, so the BAP is applicable to this claim.

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