Nonownership Exposure

The relevant exposure here is the partnership's auto nonownership liability exposure. Like any business, a partnership can become liable for bodily injury or property damage that results from the operation of a nonowned auto on the partnership's behalf. For example, say a partner drives his or her own car on partnership business. If a member of the public is injured by the partner's driving, it is entirely possible that the partnership itself could be sued and ultimately held liable for the injured person's damages. A partnership can cover this exposure under the business auto coverage form by purchasing nonowned autos coverage under symbol 9. (Symbol 1—any auto—would also apply to auto nonownership liability, but that symbol is not the subject matter of this article; for more information on the symbols for covered autos, see Business Auto Form.)

The Insurance Services Office (ISO) determined that the nonownership liability exposure with respect to partners' cars is considerable enough that extra premium should be charged. Consequently, the ISO premium development procedure for covering the nonowned auto exposure of individual partner's cars is as follows: multiply the private passenger type rates in the state company rates/ISO loss costs by .10 for each active or inactive partner for the territory in which the partnership is located. This rating base is applied regardless of the type of autos being used.