Our insured has a commercial auto policy that covers the physical damage done to the owner/insured's vehicles. The owner had maintenance completed on a vehicle one day and the following week, after traveling only 300 miles, the engine seized. The vehicle was inspected and it was discovered that the engine had no oil. Does this fit the definition of a loss and would the wear and tear exclusion apply?

Ohio Subscriber

This is definitely a loss since it meets the definition of "loss" under the business auto policy (BAP). A loss under the BAP means direct and accidental loss or damage and that is what happened here. The engine seizing up is definitely direct physical damage to the covered auto and it is accidental from the insured's viewpoint.