Business Auto Policy and Property Damage Claim

Our insured owns a pizza store and the operations include a delivery service. The insured has a business auto policy with symbols 7, 8, and 9 for liability coverage. An employee was making a delivery with a vehicle he owns and accidentally hit a parked car. The employee did have a personal auto policy but due to his own personal circumstances, the vehicle he was driving was not covered at the time of this accident. His auto insurer denied the claim and we are wondering if our insured's BAP will provide the coverage?

Washington Subscriber

If the named insured employer is found liable for the damage, its BAP would provide coverage since the accident involved the use of a covered auto. The vehicle was a covered auto based on symbol 9 which is nonowned autos used in connection with the named insured's business, and this includes autos owned by employees while used in the business of the named insured. And since there is no applicable exclusion to prevent coverage, the named insured would have the liability coverage for the claim. This coverage does not extend to the employee, however, since employees using their owned autos are specifically listed as not being insureds by the BAP under such circumstances.

Now, the insurance provide by the BAP for autos not owned by the named insured is excess over any other collectible insurance. But, since there is no other collectible insurance due to the circumstances of the employee and his car, this means that the named insured's auto policy will offer primary coverage. But again, this is based on the named insured being held liable for the damage caused by the employee.

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