Listing and Descriptions
Summary: The business auto coverage form can be modified in several ways by the use of endorsements; additional insureds can be added to the coverage form, exclusions can be added or modified, existing coverages can be redefined. The following list of endorsements is not all-inclusive, but it does represent a sampling of those endorsements that are used most often or that raise the most questions with their use.
Topics covered:
CA 01 21 10 13 extends the coverage territory to include Mexico, but only for accidents or losses occurring within 25 miles of the U.S. border, and for trips into Mexico of ten days or less. So, for example, if the insured businessman drives his covered auto into Mexico to sign a contract and has an accident there, CA 01 21 can provide him with some insurance coverage. Of course, there are limitations.
The insurance provided by CA 01 21 is excess over any other collectible insurance. If a loss to a covered auto occurs in Mexico, the insurer will pay for the loss in the U.S.; the insurer is trying to make sure the repair work is done in the United States. And, the insurance does not apply if the covered auto is not principally garaged and principally used in the United States, or to any insured who is not a resident of the United States.
The endorsement points out that auto accidents in Mexico are subject to the laws of Mexico and that Mexico considers any auto accident a criminal offense as well as a civil matter. Furthermore, the coverage provided under CA 01 21 may not be recognized by Mexican authorities. The insurer notes that the insured should consider purchasing auto coverage from a licensed Mexican insurance company before driving into Mexico.
This endorsement provides only those coverages of liability and medical payments where a premium for the coverages is shown on the schedule. CA 20 06 10 13 declares that any auto not owned by the named insured is a covered auto while used for driver training. Also, the status of an insured is granted under this endorsement to the named insured, any driving instructor, and any student driver while being instructed by the named insured or an instructor. The main advantages of this endorsement are giving covered auto status to nonowned autos used by the named insured in his business and modifying the "who is an insured" definition to include driving instructors and student drivers. The first advantage would seem to negate the need to use symbols "8″ or "9″ on the declarations page as long as the named insured uses nonowned cars only for driver training. The second advantage makes sure that those who usually use a covered auto in a driving school business (namely, instructors and student drivers) are insureds regardless of whether or not they own the autos (remember that under the business auto coverage form, those who own the covered autos hired or borrowed by the named insured are not considered as insureds).
The premiums for CA 20 06 are based on the number of driving instructors.
Endorsement CA 20 15 10 13 offers liability coverage, medical payments coverage, uninsured motorists coverage (underinsured motorists coverage can be scheduled when such coverage is not included in uninsured motorists coverage), no-fault coverage, and physical damage coverage to vehicles described in the schedule and considers these vehicles to be covered autos and not mobile equipment. The liability coverage does not apply to bodily injury or property damage resulting from the operation of any machinery that is on, attached to, or part of any of the described vehicles.
Due to this endorsement, any auto that the named insured repossesses is considered to be a covered auto, but only while being repossessed by the named insured, held for sale after repossession by the named insured at locations listed in the endorsement's schedule, or pending delivery after sale. The repossessed cars can be insured for liability and physical damage coverages. The premium basis can be on a reporting basis (quarterly or monthly) or on a nonreporting basis, whichever is agreed to by the named insured and the insurer. The insurance provided by this endorsement does not apply to any auto while used for other business or personal purposes; so, if the insured or his employee wants to use the repossessed auto to visit a friend or to run to the diner for lunch, CA 20 19 10 13 excludes coverage. Finally, it should be noted that CA 20 19 clearly states that "who is an insured" does not include anyone from whom an auto has been repossessed.
Obviously, this endorsement provides insurance coverages for snowmobiles that are described as covered autos on the schedule; the available coverages are liability, medical payments, uninsured motorists (underinsured motorists coverage can be scheduled when such coverage is not included in uninsured motorists coverage), and other nonphysical damage. Despite the fact that the endorsement allows the insured to describe the snowmobiles to be covered in a schedule, it also takes the opportunity to define "snowmobile"; the term means a land motor vehicle that is designed for use on ice and snow and mainly off public roads and that is propelled only by mechanical means other than airplane type propellers or fans. CA 20 21 10 13 adds several exclusions to the business auto coverage form. The insurance does not apply to: the snowmobile while rented or leased to others by the named insured; under liability coverage, bodily injury to anyone occupying or towed by the snowmobile; loss to the snowmobile resulting from breaking through ice. Some of the exclusions can be deleted by paying an additional premium noted on the endorsement. The total premium that is stated in the schedule applies for the entire policy period and it will not be refunded if the named insured cancels the insurance policy.
Endorsement CA 20 48 10 13 allows a designated person or organization to be scheduled as an insured for liability coverage under commercial auto forms. Each person or organization indicated on the endorsement's schedule is an insured, but only to the extent that the person or organization qualifies as an insured under the who is an insured provisions of the particular coverage form.
Many employees rent cars while on business trips for their employers. The problem has always been that the who is an insured clause under the BAP considers as an insured "anyone else while using with your permission a covered auto you (the named insured) owns, hires, or borrows". So, if the traveling employee rents a car in his or her own name, the who is an insured clause does not make that employee an insured; the car had to have been rented by the named insured employer. Endorsement CA 20 54 10 13 corrects this problem by declaring that "an employee of yours is an insured while operating an auto hired or rented under a contract or agreement in that employee's name, with your permission, while performing duties related to the conduct of your business". The other insurance condition is changed so that, for hired auto physical damage coverage, any covered auto hired or rented by the employee in his or her name on company business is deemed to be a covered auto owned by the named insured; this, of course, makes the named insured's BAP primary insurance.
Note that this endorsement does not spell out just what "performing duties related to the conduct of your business" entails. If the employee uses the rented car to go out to dinner at night or to make a side trip to visit a relative, is that part of "duties related to the conduct of the named insured's business'"? Future court cases will answer that question, probably on a case-by-case basis.
The fellow employee exclusion under the BAP does not allow the insurance to apply to bodily injury to any fellow employee of the insured arising out of and in the course of the fellow employee's employment. This exclusion deletes that exclusion. Therefore, if the named insured wants his BAP to provide bodily injury liability coverage in a situation where, for example, an employee is driving a fellow employee in a covered auto and causes an accident that injures the fellow employee, who then files a lawsuit, this endorsement is the ticket. CA 20 55 10 13 gives the driver-employee some protection as an insured under the employer's BAP.
This endorsement is similar to endorsement CA 20 56 10 13, except that it limits the deletion of the fellow employee exclusion to employees, job titles, or positions named or listed in the schedule of the endorsement. So, for example, if the named insured wanted his or her foremen to be excepted from the fellow employee exclusion, then the foremen's names or the job title "all foremen" would be listed in the schedule.
This endorsement amends the physical damage coverage section of the BAP. CA 20 71 10 13 provides that, in the event of a total loss to a covered auto, the insurer will pay any unpaid amount due on the lease or loan for the covered auto.
CA 20 71 is the commercial auto equivalent of the personal auto endorsement, PP 03 35. The wording on the two endorsements is similar.
This endorsement applies to autos held for sale by nondealers. It has a schedule for listing the types of autos (new or used), the interests covered (the named insured's interests and those of any creditor), the locations where the named insured conducts operations, and the limits of insurance for each location. CA 20 78 03 10 pays for physical damage to the autos, and the most that the insurer will pay for all loss at any one location is the amount shown in the schedule for that location; this is so regardless of the number of covered autos involved in the loss.
CA 20 78 provides physical damage coverage for vehicles held for sale by service risks, such as auto repair shops and garages, as opposed to auto dealerships. The coverages provided are comprehensive, specified causes of loss, or collision, whatever the insured wishes to purchase. The endorsement specifically excludes loss by false pretense; loss to any covered auto displayed at any location not shown in the schedule (if the loss occurs more than forty-five days after the use of the location begins); under collision coverage, loss to any covered auto while being driven or transported from the point of purchase to its destination if such points are more than fifty road miles apart; and under specified causes of loss coverage, loss caused by the collision or upset of any vehicle transporting any covered auto. Finally, the endorsement excludes expected profit, including loss of market value or resale value.
CA 23 04 10 13 states that liability coverage for a covered auto that is a rolling store is changed by adding the following exclusion: the insurance does not apply to bodily injury or property damage resulting from the handling, use, or condition of any item that the insured makes, sells, or distributes if the injury or damage occurs after the insured has given up possession of the item. The endorsement does not define "rolling store", but the term probably refers to a vehicle used as a mobile snack bar or lunch van, selling food and drinks to people like construction workers or others where the products are brought to the customers instead of the customers going to a place of business to eat and drink. Using this as an example, if the insured sells a ham sandwich from his rolling store to a construction worker and the worker later gets sick from that sandwich, the business auto form will not provide coverage for any claim arising out of that incident.
This endorsement changes liability coverage under the business auto form and the motor carrier coverage form by adding an exclusion. CA 23 05 10 13 excludes coverage for bodily injury or property damage resulting from the delivery of any liquid into the wrong receptacle or to the wrong address if the injury or damage occurs after delivery has been completed. CA 23 05 seems to be superfluous in that the business auto form has a built-in exclusion (completed operations) for injury or damage arising out of the work of the named insured after that work has been completed. In any case, CA 23 05 is available if the insured wants it or the insurer requires it.
With respect to the employers liability exclusion on the commercial auto coverage forms, the definition of employee is changed by endorsement CA 23 25 10 13 so that an employee does not include a leased worker. This is done so that a leased worker can seek damages for bodily injury, for example, under the named insured's business auto policy and not have the claim automatically excluded because the leased worker is considered an employee of the named insured. The endorsement basically makes the leased worker an employee of the leasing firm and allows the named insured's BAP to provide liability coverage for the named insured in case the leased worker files a claim against the named insured.
This endorsement is for covered autos that are licensed or used to transport the public. What CA 24 02 10 13 does is to modify the care, custody, or control exclusion on the business auto coverage form so that the exclusion does not apply to property damage to or covered pollution cost or expense involving property of the insured's passengers while such property is carried by the covered auto. CA 24 02 simply reinforces the fact that common carriers are liable for damage done to their passengers' property, such as luggage or clothing.
Endorsement CA 99 05 02 14 provides coverage for the actual loss of business income the named insured sustains due to the necessary suspension of operations during the period of restoration (a defined term on the endorsement). The suspension must be caused by a direct and accidental loss or damage to scheduled property and the loss or damage must be caused by or result from a covered cause of loss.
The endorsement also provides extra expense coverage.
This endorsement changes the physical damage coverage limit of insurance provisions of the commercial auto forms by stating that the most the insurer will pay for loss is the least of the following amounts minus any applicable deductible: the actual cash value of the damaged or stolen property as of the time of the loss; the cost of repairing or replacing the damaged or stolen property; or the amount shown in the schedule of CA 99 28 10 13. To clarify the payment situation, the endorsement notes that "the amount shown in the schedule or in the declarations is not necessarily the amount you will receive at the time of loss for the described property". This is to notify the insured that just because a stated amount is listed on the endorsement, there is no guaranty that that amount will be paid for the loss to the insured's car. The insurer reserves for itself the right to pay a lesser amount if the situation warrants.
This endorsement is available for the business auto coverage form, the garage coverage form, and the motor carrier coverage form. Under comprehensive coverage, CA 99 30 10 13 allows payment for loss to tapes, records, discs, or other similar devices used with audio, visual, or data electronic equipment. However, for coverage to apply, these items must be the property of the named insured or a family member and must be in a covered auto at the time of loss. The most that the insurer will pay for loss under this endorsement is $200. Physical damage coverage provisions apply under this endorsement, except for any deductible.
The following is added to the liability coverage "who is an insured" provision of the business auto form, the truckers form, and the motor carrier coverage form through the use of this endorsement: anyone volunteering services to the named insured is an insured while using a covered auto not owned, hired, or borrowed by the named insured to transport clients or other persons in activities necessary to the business of the named insured. In other words, if Mrs. Smith drives a neighbor and herself to work at a center for abused women, CA 99 34 10 13 will extend liability coverage under the center's business auto form to Mrs. Smith and the neighbor.
This endorsement can be added to a business auto coverage form to provide garagekeepers coverage (with direct coverage options) to risks that are not engaged in a typical garage operation, such as a business that installs car stereos or CB systems. Some definitions for the business auto form are added by CA 99 37 10 13: garage operations and work you (the named insured) performed. Additionally, the definition of "customer's auto" is added and refers to a customer's land motor vehicle or trailer or semitrailer that is lawfully within the possession of the named insured for service, repair, storage or safekeeping, with or without the vehicle owner's knowledge or consent. Furthermore, the definition of "loss" is expanded to include any resulting loss of use, in keeping with the usual garagekeepers coverage.
CA 99 61 10 13 simply lists a loss payee that will be paid along with the named insured for a loss to audio, visual, and data electronic equipment. The insurance covers the interest of the loss payee unless the loss results from conversion, secretion, or embezzlement on the part of the named insured. If the insurer makes any payment to the loss payee, the insurer obtains his or her rights against any other party. This endorsement also allows the insured to increase the $1,000 limit listed in the limit of insurance clause of the BAP for loss to the specified items.
This is an endorsement that allows the insured to choose higher limits than the $20 per day/$600 maximum limits that are currently on the BAP. CA 99 90 10 13 provides that the insurer will pay the limits that are shown in the schedule of the endorsement. The payment is for the expenses for which an insured becomes legally responsible to pay for loss of use of a vehicle rented or hired without a driver under a written rental contract or agreement.
CA 04 42 10 13 states that the following are not insureds under the liability section of the BAP: the United States of America or any of its agencies, or any United States Government employee, including the named insured. This is so for bodily injury or property damage resulting from the operation of an auto under the following conditions: the bodily injury or property damage results while the employee is acting as an employee; and, the Federal Tort Claims Act requires the U.S. Attorney General to defend the employee in any civil action or proceeding that may be brought for the injury or damage.
Endorsement CA 04 44 10 13 simply is a waiver of subrogation endorsement. It states that the transfer of rights of recovery against others condition does not apply to the person(s) or organization(s) shown in the schedule of the endorsement. This waiver of subrogation is effective only to the extent that subrogation is waived prior to the accident or the loss under a contract with that person or organization.
This endorsement provides only those coverages where a premium is shown in the schedule. Each of these coverages applies only to the vehicles shown as covered autos in the schedule. CA 04 45 10 13 provides liability, med pay, personal injury protection (or no-fault equivalent), and uninsured motorists (and underinsured motorists when not included in uninsured motorists coverage) coverages for the golf cart and low-speed vehicles described as covered autos in the endorsement's schedule.
Endorsement CA 23 97 10 13 declares that the BAP insurance does not apply to loss to any type of amphibious vehicle (whether or not self-propelled) resulting from the ownership, maintenance, or use of any amphibious vehicle, or to any property or equipment contained in or used with any such vehicle. This exclusion applies only while the amphibious vehicle is being launched into, used in or beached from the water. Note that the term "amphibious vehicle" is not defined in the endorsement.
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