Employee's Auto Rented
by Employer — How to Cover?

We have an example of a possible coverage gap under the business auto coverage form. A landscaping business owns a number of pickup trucks used to transport workers and equipment from one job site to another. In the middle of an especially busy day, one of the pickup trucks breaks down and is taken out of service. The job site supervisor needs to move some equipment, so he calls the home office and the business owner agrees to pay $100 to borrow the supervisor's personal pickup truck for a few hours. While using the supervisor's pickup to move the equipment, a pedestrian is struck and severely injured; the business owner is sued.

The business owner has a business auto policy, but only uses symbols 2, 8, and 9 for liability coverage — owned autos only, hired autos, and nonowned autos respectively. We see a coverage gap here in that the supervisor's pickup truck does not fit the definitions for a covered auto using symbols 2, 8, and 9: the vehicle was not owned by the named insured business owner; it was hired or rented from the named insured's employee, so symbol 8 is not the proper symbol; and symbol 9 is not correct because the vehicle was hired or rented.