My client is an employer who owns no autos. However, he does have hired and nonowned autos coverage under the business auto policy (BAP) through the use of symbols 8 and 9. Sometimes, the employees rent cars or use their own autos for business purposes and my client wants to know if the BAP provides liability coverage under these circumstances for both the employees and him.

Ohio Subscriber

If an employee uses his own car on the business of the employer, symbol 9 of the BAP specifically provides coverage for the employer. However, the employee is not automatically considered an insured under the BAP; rather, he must rely on his own personal auto policy (PAP) or on an endorsement to the employer's BAP. The employee's personal auto policy insures him for the use of any auto and the business use exclusion on the PAP does not apply to the use of a private passenger auto or a van owned by the employee. Endorsement CA 99 33 02 99 (employees as insureds) states that any employee is an insured while using in the business of the named insured a covered auto that the named insured does not own or hire, and symbol 9 makes the employee's car a covered auto. It should be noted that the employee's personal auto policy is the primary carrier in this instance, even for the employer since he is covered under the employee's PAP by way of the definition of “insured” that includes any entity with legal responsibility for the acts or omissions of the named insured (the employee).

If the employee rents a car, he can do so in either his own name or in the name of the employer. If the employee rents a car in his own name for the employer's business purposes, the situation is the same as described above with the employee using his own car, except for the fact that the PAP is considered excess over any other collectible insurance since the vehicle is not owned by the named insured.

When the employee rents a car in the name of the employer, symbol 8 of the employer's BAP then comes into play. This symbol applies to autos hired or rented by the named insured; therefore, the employer as named insured has liability coverage for the use of the rented car. The employee will also be considered an insured under the BAP since he is using a covered auto with the permission of the named insured employer; the terms of the definition of “insured” are met in that instance because the covered auto is rented by the named insured and the employee does not own the rented car. If the employee rents a car in the employer's name, the personal auto policy of the employee will also provide liability coverage to the employee since he is an insured for the use of any auto; however, the PAP will not provide coverage for the employer. The definition of “insured” under the PAP includes, for any auto other than a covered auto, any organization with respect to legal responsibility for acts or omissions of the named insured; however, this provision applies only if the organization does not own or hire the auto. If the auto is rented in the name of the employer, the organization has hired the auto. Since a nonowned auto is involved here, both the BAP and the PAP are considered excess over any other collectible insurance.

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